Giffen Good

A consumer good for which demand rises when the price increases, and demand falls when the price decreases. This phenomenon is notable because it violates the law of demand, whereby demand should increase as price falls and decrease as price rises. To be a Giffen good, the item must lack easy subsitutes and it must be an inferior good, or a good for which demand declines as the level of income in the economy increases. Economists disagree on whether Giffen goods exist and how common they are.

The other type of consumer good that violates the law of demand is a Veblen good. Demand for Veblen goods increases as their prices increase because people perceive them to be of higher quality. A designer handbag would be an example of a Veblen good.

Investment dictionary. . 2012.

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  • Giffen good — /gifˈən gŭd/ (economics, etc) noun A foodstuff of relatively low quality which forms an important part of the diet of low income households, demand for which (contrary to the normal rule) increases when its price rises and decreases when it falls …   Useful english dictionary

  • Giffen good — In economics (consumer theory), a Giffen good is that which people consume more of as price rises, violating the law of demand. In normal situations, as the price of such a good rises, the substitution effect causes people to purchase less of it… …   Wikipedia

  • Giffen good — commodity for which the demand grows as its price increases …   English contemporary dictionary

  • Good (economics) — Types of goods in economics. In economics, a good is something that is intended to satisfy some wants or needs of a consumer and thus has economic utility. It is normally used in the plural form goods to denote tangible commodities such as… …   Wikipedia

  • GIFFEN, George (1859-1927) — cricketer was born at Adelaide on 27 March 1859. He played cricket with enthusiasm as a boy and attracted the notice of two brothers, Charles and James Gooden, who coached him. Early in 1877 he played for South Australia against a visiting East… …   Dictionary of Australian Biography

  • Inferior good — Good Y is a normal good since the amount purchased increases from Y1 to Y2 as the budget constraint shifts from BC1 to the higher income BC2. Good X is an inferior good since the amount bought decreases from X1 to X2 as income increases. In… …   Wikipedia

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  • Robert Giffen — For the U.S. Navy admiral, see Robert C. Giffen Robert Giffen (1837 ndash; April 12 1910), was a British statistician and economist. He was born at Strathaven, Lanarkshire. He entered a solicitor s office in Glasgow, and while in that city… …   Wikipedia

  • Veblen good — In economics, Veblen goods are a theoretical group of commodities for which peoples preference for buying them increases as a direct function of their price, instead of decreasing according to the theory of supply and demand.It is claimed that… …   Wikipedia

  • Public good — For the egalitarian terms, see Common good and Public interest. In economics, a public good is a good that is nonrival and non excludable. Non rivalry means that consumption of the good by one individual does not reduce availability of the good… …   Wikipedia

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