Consumer Spending and Income Elasticity. Joel Waldfogel talked about his book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays (Princeton University Press; October 25, 2009).

Comprehensively, the income effect looks at how rising or falling income effects demand for goods and services in the economy. The price effect looks at how demand is affected by prices.

The high income elasticity of demand often estimated for U.S. imports may be a spurious result of omitting new product varieties from the import price indexes. The purpose of this paper is to ...