Giffen Behavior and Subsistence Consumption
AbstractThis paper provides the first real-world evidence of Giffen behavior, i.e., upward sloping demand. Subsidizing the prices of dietary staples for extremely poor households in two provinces of China, we find strong evidence of Giffen behavior for rice in Hunan, and weaker evidence for wheat in Gansu. The data provide new insight into the consumption behavior of the poor, who act as though maximizing utility subject to subsistence concerns. We find that their elasticity of demand depends significantly, and nonlinearly, on the severity of their poverty. Understanding this heterogeneity is important for the effective design of welfare programs for the poor. (JEL D12, O12)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 98 (2008)
Issue (Month): 4 (September)
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Minagawa, Junichi, 2012. "On Giffen-like goods," Economics Letters, Elsevier, vol. 115(2), pages 282-285.
- Rodrik, Dani, 2008. "The New Development Economics: We Shall Experiment, but How Shall We Learn?," Working Paper Series rwp08-055, Harvard University, John F. Kennedy School of Government.
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"More or Better ? Measuring Quality versus Quantity in Food Consumption,"
LEM Papers Series
2009/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Corinna Manig & Alessio Moneta, 2009. "More Or Better? Measuring Quality Versus Quantity In Food Consumption," Papers on Economics and Evolution 2009-13, Max Planck Institute of Economics, Evolutionary Economics Group.
- Sakai, Yoko & Estudillo, Jonna P. & Fuwa, Nobuhiko & Higuchi, Yuki & Sawada, Yasuyuki, 2012. "Do Natural Disasters Affect the Poor Disproportionately? The Case of Typhoon Milenyo in the Rural Philippines," PRIMCED Discussion Paper Series 31, Institute of Economic Research, Hitotsubashi University.
- Schwab, Benjamin, 2013. "In the form of bread? A randomized comparison of cash and food transfers in Yemen," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150448, Agricultural and Applied Economics Association.
- Chen, Xi & Zhang, Xiaobo, 2012.
"Costly posturing: relative status, ceremonies and early child development in China:,"
IFPRI discussion papers
1206, International Food Policy Research Institute (IFPRI).
- Chen, Xi & Zhang, Xiaobo, 2012. "Costly Posturing: Relative Status, Ceremonies and Early Child Development in China," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Jensen, Robert T. & Miller, Nolan, 2008. "Do Consumer Price Subsidies Really Improve Nutrition?," Working Paper Series rwp08-025, Harvard University, John F. Kennedy School of Government.
- Yochanan Shachmurove & Janusz Szyrmer, 2011. "Sir Robert Giffen Meets Russia in Early 1990s," PIER Working Paper Archive 11-020, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Marek Hudík, 2011. "Rothbardian demand: A critique," The Review of Austrian Economics, Springer, vol. 24(3), pages 311-318, September.
- McFall, William & Magnan, Nicholas & Spielman, David J., 2013. "Hybrid Rice as a Pro-Poor Technology? Evidence from Bangladesh," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150150, Agricultural and Applied Economics Association.
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