In the 2x2 table above from the Shrewd Samaratan, via MarginalRevolution, there are two dimensions:
- "Gone Forever," goods and services whose purchases were abandoned during the shutdown, vs.
- "Snap-Back," purchases that were postponed by the shutdown.
- Income Elasticity of Demand measures sensitivity of demand to income.
- High Income Elasticity, goods whose demand falls as income falls, vs
- Low Income Elasticity, goods whose demand is relatively insensitive to income.
The colors correspond to the outlook for each industry:
- Orange box: lost profits from abandoned purchases, and low future demand because income has fallen.
- Green box: delayed profits from postponed purchases; and relatively high future demand.
The two off diagonal boxes are in-between these two extremes:
- Blue lower-left box: lost profit from abandoned purchases, but relatively high future demand
- Blue upper-right box: delayed profits from postponed purchases, but relatively high future demand.