Meaning of Giffen good | Babel Free

Definitions

A type of inferior good for which the quantity demanded increases when its price rises, and decreases when its price falls, thus violating the usual law of demand.

Equivalents

Examples

“To qualify as a Giffen good, a good must be inferior and must have an income effect strong enough to overcome the substitution effect. The example often cited of a possible Giffen good is the potato during the Irish famine of 1845–1849.”

“Economists no longer believe that potatoes were Giffen goods during the great famine, so the quest for the “exceptional case” has continued. […] Last year the economist Garth Heutel published evidence that theme park rides could be Giffen goods.”

CEFR level