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Fantastic Giffen goods and where to find them

Author

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  • Ian Hamilton

    (University of Warwick)

Abstract

Giffen goods regularly feature in undergraduate and graduate level microeconomics courses. Nevertheless, they have taken on a somewhat fantastical status - misunderstood curios, whose existence in the real world is disputed. Explanations of their limited identification often rest on claimed properties, which have come to be understood as necessary for Giffen behavior. Using a dual constraint maximization construct, based on Marshall's original example, this paper demonstrates that Giffen goods need not have these claimed properties. Further, it suggests that real-world examples may be more common than has been generally thought, where they might be found, but also why identification has been limited. The analysis leads to the speculation that wider use of a more intuitive framework in the teaching of Giffen goods may have positive effects in areas such as financial regulation.

Suggested Citation

  • Ian Hamilton, 2025. "Fantastic Giffen goods and where to find them," Economics Bulletin, AccessEcon, vol. 45(1), pages 55-62.
    • Handle: RePEc:ebl:ecbull:eb-25-00083
    as

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    References listed on IDEAS

    as
    1. Battalio, Raymond C & Kagel, John H & Kogut, Carl A, 1991. "Experimental Confirmation of the Existence of a Giffen Good," American Economic Review, American Economic Association, vol. 81(4), pages 961-970, September.
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    3. Creedy, John, 1990. "Marshall and Edgeworth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 37(1), pages 18-39, February.
    4. Davies, John E, 1994. "Giffen Goods, the Survival Imperative, and the Irish Potato Culture," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 547-565, June.
    5. Robert T. Jensen & Nolan H. Miller, 2007. "Giffen Behavior: Theory and Evidence," NBER Working Papers 13243, National Bureau of Economic Research, Inc.
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    7. Robert T. Jensen & Nolan H. Miller, 2007. "Giffen Behavior: Theory and Evidence," CID Working Papers 148, Center for International Development at Harvard University.
    8. Holmgren, Mark, 2024. "A Brief History of Giffen Behavior and an Applicable Student Example," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 6(01), April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Giffen behavior; Giffen paradox; comparative statics; demand theory; upward-sloping demand; consumer theory; economic pedagogy; substitution effect; income effect; financial regulation;
    All these keywords.

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • D1 - Microeconomics - - Household Behavior

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