Linux in a Recession

I don't have much time this week, so this will be a short post. I also happen to have an economics midterm coming up, so why not write about that?

I was thinking about Linux adoption and how the operating system market fits into the nice supply and demand diagram. Linux, as a free (as in beer) alternative, should in theory rapidly take over the market. Of course, that is not the case, with Microsoft still having a strong hold with Windows.

Then I learned about inferior goods. For normal goods, when people have more spending power (ie. more income), people buy more. For inferior goods though, people buy more when they have less income. The word "inferior" refers not to the quality of the product, but to when people are willing to pay for them.

Which makes me wonder - would Linux be considered an inferior good? At some point of income loss, people must balance the familiarity of Windows with the lost cost of Linux. Below that income, people will buy (er, download) Linux; above that income, people will buy Windows. From this reasoning, it seems that a recession - like the one we're going through - can only help spread Linux to more people.

I wonder where I can find the Linux adoption data to match up with economy recessions.

1 comment :

  1. Forget what you've learned in standard econ. Behavioral economics says that one of the reasons people don't always make the most economically rational choices is because of our strong aversion to unsettling the status quo. The "familiarity of Microsoft" is a huge deterrent to switching to Linux.

    Have you learned about Giffen goods yet? Goods that people buy more of when the price rises? It's fun to try to think of examples of that one.