Giffen good

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Fig. 81 General equilibrium analysis. An increase in the price of oil is likely to increase the cost structures of many other industrial sectors, and hence serve to raise the general price level and related wage rates. This increase in prices and wages, in turn, increases input costs to the oil industry.

Giffen good

a GOOD for which quantity demanded increases as its PRICE increases, rather than falls, as predicted by the general theory of DEMAND. It applies only in the highly exceptional case of a good (see INFERIOR PRODUCT) that accounts for such a high proportion of households’ budgets that an increase in price produces a large negative INCOME EFFECT, which completely overcomes the normal SUBSTITUTION EFFECT. See PRICE EFFECT, UPWARD-SLOPING DEMAND CURVE.
References in periodicals archive ?
Furthermore, each good with a downward-sloping demand curve must have at least one gross substitute and each Giffen good - if there are any - must have at least one gross complement.
Raising the price of heroin (by increasing the expected penalty) presumably wouldn't have done that, but it still might have stimulated substitution of heroin for crack, Katyal's account implies,(89) because of a Giffen goods effect.
Indeed, it's even possible, under these circumstances, that pornography addicts will plow the "income" saved from forgone rapes back into the consumption of pornography, in which case pornography would, for these men, exhibit the characteristics of a Giffen good.
Experimental Confirmation of the Existence of a Giffen Good.
A Contribution to the New Theory of Demand: A Rehabilitation of the Giffen Good.
Dougan |1982~ quite convincingly points out that little evidence would come from an analysis of market demand curves, Johnston and Larson suggest, however, that a substantial body of econometric evidence on Giffen goods exists in the agricultural economics literature.
In the original sense of Hicksian utility analysis, potential Giffen goods are generated by very unusual preferences.
The original purpose of our paper was to attempt to answer Boland's criticism of utility theory--namely that if we cannot dismiss the existence of Giffen goods we should at least be able to predict the conditions that generate them.
Although the typical textbook examples of Giffen goods are generally limited to the two-good case, it is of interest to determine whether the Giffen effect vanishes when a wider variety of goods are available for consumption.
As pointed out by referee, Marshall's original reference to Giffen goods concerned bread and meat.
also recognizes the critical element of subsistence in his presentation of Giffen goods.
answered Boland's critique by demonstrating the impossibility of observing a Giffen good at the market level.