Is Recruitment an Inferior Product?

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Happy 2012!

This got prompted by Peter Martin’s post in relation to inferior goods.

Inferior goods are defined as those for which demand decreases as their users’ disposable income increases. He mentions cask wine and International Roast coffee as a couple of retail/consumer examples.

Is your recruitment product an inferior good, based on the definition above?

When our clients are better off financially, do they seek out your services or do they seek to replace you with what they perceive is a superior product (DIY recruitment, a more reputable agency, employer branding consultants)?

Yes, there are many moving parts to offer a one true answer. This is an intrinsic limitation of the neoclassical economic model which relies a lot on the Ceteris Paribus (all other variables remaining equal) which never happens in real life.

However is it worthwhile asking this question as recruitment service providers, don’t you think?

inferior_goods
Looking forward to being in touch during 2012

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