Thursday, August 27, 2009

Bud, Coors, and Miller are Inferior Goods

"Heineken and Corona are struggling more than Anheuser-Busch and MillerCoors -- which have 80% of the U.S. market by volume -- because beer drinkers are picking out the cheapest drink from the cooler."

From a recent CNN article on beer prices. Economist call any good where demand increases when income goes down an inferior good, famous examples include hot dogs, ramen, and low quality toilet paper. Incomes are going down now and people are reaching for the cheap beer (at least according to CNN).

My Dad forwarded me this article and said it was bad news. I'm not so sure if it so bad for people like me and my dad. If non-bud beers are normal goods, as income goes down people buy less. Then beer prices for good beers should actually fall during an economic downturn. Since we don't drink bud type beers we should be good.

But I don't worry about this too much, I just relax and have a homebrew.

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