hickup in my understanding of elasticity... or investopedia is wrong

I understand elasticity in general to be interpreted as …If some item (income, price…so on) were to change by a certain amount, demand would change more if elastic and change less in inelastic.

by that understanding a normal good would have positive elasticity or positive inelasticity in regards to income elasticity of demand. As income increases demand will also increase more or less. I understand a value between -1 and 1 to be inelastic and greater than 1 and less than -1 to be elastic. In other words, I think a normal good would have any positive value for it’s income elasticity of demand

However investopedia had this to say (paraphrased)

…if the income elasticity of demand is between 0 and 1 the good is considered normal.

but wait, that is saying that a normal good can only be positive income inelastic. why say the elasticity cant be over 1? Why can’t a normal good be positive income elastic. ?

who is right, me or investopedia?

Normal goods have positive income elasticity.

Inferior goods have negative income elasticity.

Right

so a good with a value of .5 for it’s income elasticity of demand would have a value considered “positive inelastic” and it would be a normal good, yes?

also, a good with a value of 1.5 for it’s income elasticity of demand would have value considered “positive elastic” and would also be a normal good, yes?

I know this is overspecific in relation to the definition of normal goods. I’m more concerned I am mixed up in my understanding of values of elasticity and how to interpret them.

Yes: a normal, income inelastic good.

Yes: it’s a normal, income elastic good.

It sounds as though you have it down.

super duper…moving on :slight_smile: