Giffen Behavior: Theory and Evidence / Robert T. Jensen, Nolan H. Miller.

Format:

Book

Author/Creator:

Jensen, Robert T.

Contributor:

National Bureau of Economic Research.

Miller, Nolan H.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13243.

NBER working paper series no. w13243

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Giffen Behavior

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

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.

Notes:

Print version record

July 2007.