In economics, neutral goods refers either to goods whose demand is independent of income, or those that have no change on the consumer's utility when consumed.
Under the first definition, neutral goods have substitution effects but not income effects. Examples of this include prescription medicines such as insulin for diabetics. An individual's income may vary, but their consumption of vital medicines remains constant.
Because demand remains relatively unchanged as income rises or falls, neutral goods are distinct from normal goods—whose demand increases with income—and inferior goods—whose demand decreases as income increases.