Necessity good

Necessity goods are product(s) and services that consumers will buy regardless of the changes in their income levels, therefore making these products less sensitive to income change.

[2] If income elasticity of demand is lower than unity, it is a necessity good.

[3] This observation for food, known as Engel's law, states that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises.

This makes the income elasticity of demand for food between zero and one.

Some necessity goods are produced by a public utility.