Income Elasticity of demand = Percentage change in quantity demanded / Percentage change in income

The decision rules are:

• If Income Elasticity of demand is positive but less than 1, the good is a normal and necessary good.
• If Income Elasticity of demand is positive and greater than 1, the good is a normal and luxury good.
• If Income Elasticity of demand is negative, the good is an inferior good.

Since, the Income Elasticity of Demand for tourism in the Chinese outbound market was 3, the demand for tourism in the Chinese outbound market is a normal and luxury good.