Giffen Behavior: Theory and Evidence
This 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, with both demand and calorie elasticities depending significantly, and non-linearly, on the severity of their poverty. Understanding this heterogeneity is important for the effective design of welfare programs for the poor.
|Date of creation:||Jul 2007|
|Publication status:||published as Robert T. Jensen & Nolan H. Miller, 2008. "Giffen Behavior and Subsistence Consumption," American Economic Review, American Economic Association, vol. 98(4), pages 1553-77, September.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas, Duncan & Strauss, John, 1997.
"Health and wages: Evidence on men and women in urban Brazil,"
Journal of Econometrics,
Elsevier, vol. 77(1), pages 159-185, March.
- Thomas, D. & Strauss, J., 1997. "Health and Wages: Evidence on Men and Women in Urban Brazil," Papers 97-05, RAND - Reprint Series.
- Gilley, Otis W & Karels, Gordon V, 1991. "In Search of Giffen Behavior," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 182-89, January.
- Boland, L A, 1977. "Giffen Goods, Market Prices and Testability," Australian Economic Papers, Wiley Blackwell, vol. 16(28), pages 72-85, June.
- Sherwin Rosen, 1999.
Journal of Political Economy,
University of Chicago Press, vol. 107(S6), pages S294-S313, December.
- Sherwin Rosen, 1997. "Potato Paradoxes," University of Chicago - George G. Stigler Center for Study of Economy and State 135, Chicago - Center for Study of Economy and State.
- Dougan, William R, 1982. "Giffen Goods and the Law of Demand," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 809-815, August.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
- Richard G. Lipsey & Gideon Rosenbluth, 1971. "A Contribution to the New Theory of Demand: A Rehabilitation of the Giffen Good," Canadian Journal of Economics, Canadian Economics Association, vol. 4(2), pages 131-63, May.
- 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 961-70, September.
- Koenker, Roger, 1977. "Was Bread Giffen? The Demand for Food in England Circa 1790," The Review of Economics and Statistics, MIT Press, vol. 59(2), pages 225-29, May.
- George J. Stigler, 1947. "Notes on the History of the Giffen Paradox," Journal of Political Economy, University of Chicago Press, vol. 55, pages 152-152.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13243. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.