Legal Definitions - bads

In economics, the term bads refers to products or services whose consumption tends to decrease as an individual's wealth or income increases. Unlike typical "goods," which people often consume more of as they become wealthier, "bads" are items that individuals might purchase out of necessity when their financial resources are limited. As their economic situation improves, they are likely to reduce or stop consuming these items, opting instead for higher-quality or more desirable alternatives.

• Reliance on Public Transportation:

  An individual with a lower income might heavily rely on public buses or trains for daily commuting. As their wealth increases, they might purchase a personal vehicle, such as a car, significantly reducing their use of public transportation. In this scenario, public transportation services could be considered a "bad" because its consumption decreases as the person's financial well-being improves.

• Generic Store-Brand Products:

  Households on a tight budget often prioritize purchasing generic or store-brand versions of groceries, cleaning supplies, or over-the-counter medications to save money. As their income rises, these same households might switch to more expensive, well-known national brands, which they perceive as higher quality or more desirable. Here, generic store-brand products function as "bads" because their consumption declines as the consumer's wealth grows.

• Instant Noodles and Cheap Processed Meals:

  Someone with limited financial resources might frequently consume inexpensive instant noodles or highly processed, low-cost frozen meals due to their affordability and convenience. However, as their income increases, they might opt for fresh, higher-quality ingredients, organic produce, or dining out at more upscale restaurants. In this context, instant noodles and similar cheap processed meals are "bads" because their consumption decreases as the individual's wealth allows for more nutritious or preferred food choices.