Example
A classic example of a giffen good is rice in a poor country. When the price of rice is low people have extra money and buy more meat. However, when the price of rice rises people can afford less meat and therefore buy more rice.Cause
Giffen goods occur where a price rise causes more expensive substitutes to be beyond people's budgets.| Overview: Giffen Good | ||
Function | ||
Definition | A good that receives more demand at a higher price because people can no longer afford more expensive substitutes. | |
Illustrative Example | A video game enthusiast can no longer afford a trip when the price of video games goes up, so she buys more video games and stays home on her vacation days. | |
Related Concepts | ||
