<p>I would expect necessity goods to have an income elasticity between 0 and 1 in keeping with <a href="https://en.wikipedia.org/wiki/Engel%27s_law" rel="nofollow noreferrer">Engel's Law</a>, which was originally observed for food (an obvious necessity good).</p>

<p>Housing indeed exhibits this feature because poorer households spend a larger fraction of their income on housing. That makes housing look like a necessity good. E.g.,</p>

<p><a href="https://i.sstatic.net/VjPuu.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/VjPuu.png" alt="enter image description here"></a></p>

<p>(source: <a href="http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx" rel="nofollow noreferrer">http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx</a>)</p>

CC BY-SA 3.0
2017-11-19T08:46:50.550Z
2017-11-19T08:46:50.550Z
Ubiquitous
<p>Dependent on what part of the world you live in and are you living within your means. I assume you are from a first world country, it is generally expected that you own a house by any standards (Homelessness is frowned upon by society generally whether we like to admit it or not), so I would class this as a Normal Necessity Good.</p>

CC BY-SA 3.0
2017-11-19T10:37:24.080Z
There are other possibilities as well as owning a house and homelessness, eg renting, shared ownership, living in house owned by parents.
Adam Bailey
CC BY-SA 3.0
2017-11-19T05:33:54.260Z
2017-11-19T05:33:54.260Z
Lo-urc
<p>I am trying to write my performance assessment about income and price elasticities of demand but I have a hard time figuring out if a house is a normal necessity good or a normal luxury good.</p>

<p>Everyone needs a house, however, no one needs a mansion. So which is it, is a house a normal necessity good or a normal luxury good?</p>

<microeconomics>
Do you consider a house a normal NECESSITY good or normal LUXURY good?
Bernard Ordiz
# Do you consider a house a normal NECESSITY good or normal LUXURY good?

(Asked by: username_0 on 2017-11-19)

I am trying to write my performance assessment about income and price elasticities of demand but I have a hard time figuring out if a house is a normal necessity good or a normal luxury good.

Everyone needs a house, however, no one needs a mansion. So which is it, is a house a normal necessity good or a normal luxury good?

**Tags:** microeconomics


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## 2 answers

### Answer by username_1 on 2017-11-19. Score: 2

I would expect necessity goods to have an income elasticity between 0 and 1 in keeping with [Engel's Law](https://en.wikipedia.org/wiki/Engel%27s_law), which was originally observed for food (an obvious necessity good).

Housing indeed exhibits this feature because poorer households spend a larger fraction of their income on housing. That makes housing look like a necessity good. E.g.,

[![enter image description here](https://i.sstatic.net/VjPuu.png)](https://i.sstatic.net/VjPuu.png)

(source: <http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx>)


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### Answer by username_2 on 2017-11-19. Score: 0

Dependent on what part of the world you live in and are you living within your means. I assume you are from a first world country, it is generally expected that you own a house by any standards (Homelessness is frowned upon by society generally whether we like to admit it or not), so I would class this as a Normal Necessity Good.

> **Comments:**
> **username_3**: There are other possibilities as well as owning a house and homelessness, eg renting, shared ownership, living in house owned by parents.  

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