[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

demand curve for coffee to the left: at each price, the demand for coffee is less.
Similarly a decrease in the price of sugar shifts the demand curve for coffee to the right.
Market demand curves can also be shifted by noneconomic factors. The major
ones are changes in tastes, cultural factors, and changes in the composition of the
population. The candy example discussed earlier reflected a change in tastes. Other
taste changes in recent years in the United States include shifts in food choices as
a result of new health information or (often short-lived) fads associated with diets.
Health concerns led to a shift from high-cholesterol to low-cholesterol foods, and
the Atkins diet produced a temporary shift away from high-carbohydrate foods such
as bread. Cultural factors also affect demand curves. During the late twentieth century,
increasing numbers of women entered the workforce as attitudes toward married
middle-class women working outside the home shifted; and with this change, the
demand curves for child care services shifted.
Population changes that shift demand curves are often related to age. Young
families with babies purchase disposable diapers. The demand for new houses and
apartments is closely related to the number of new households, which in turn depends
on the number of individuals of marriageable age. The U.S. population has been
growing older, on average, both because life expectancies are increasing and because
birthrates fell somewhat after the baby boom that followed World War II. So there
has been a shift in demand away from diapers and new houses. Economists working
for particular firms and industries spend considerable energy ascertaining such
demographic effects on the demand for the goods their firms sell.
Sometimes demand curves shift as the result of new information. The shifts in
demand for alcohol and meat—and even more strongly for cigarettes—are related
to improved consumer information about health risks.
Changes in the cost and available of credit can also shift demand curves—for
goods such as cars and houses that people typically buy with the help of loans. When
interest rates rise and borrowing money becomes more expensive, the demand
curves for cars and houses shift; at each price, the quantity demanded is less.
Finally, what people expect to happen in the future can shift demand curves. If
people think they may become unemployed, they will reduce their spending. In this
case, economists say that their demand curves depend on expectations.
Wrap-Up
SOURCES OF SHIFTS IN MARKET
DEMAND CURVES
A change in income
A change in the price of a substitute
A change in the price of a complement
A change in the composition of the population
A change in tastes or cultural attitudes
A change in information
A change in the availability of credit
A change in expectations
58 ∂ CHAPTER 3 DEMAND, SUPPLY, AND PRICE