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Inverse demand and anti-giffen goods

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  • Kohli, Ulrich

Abstract

Consider the standard model of household theory and assume two goods, one of them a Giffen good. It is well known that the uncompensated direct demand for the Giffen good has a positive slope. However, contrary to common intuition, this note shows that the uncompensated inverse demand for the Giffen good has a negative slope, and it is the uncompensated inverse demand for the other good which is upward sloping. Positively sloped inverse demand curves tend to arise for vastly superior goods which can therefore be called anti-Giffen goods.

Suggested Citation

  • Kohli, Ulrich, 1985. "Inverse demand and anti-giffen goods," European Economic Review, Elsevier, vol. 27(3), pages 397-404.
    • Handle: RePEc:eee:eecrev:v:27:y:1985:i:3:p:397-404
    DOI: 10.1016/S0014-2921(85)80024-6
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    References listed on IDEAS

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    1. George J. Stigler, 1947. "Notes on the History of the Giffen Paradox," Journal of Political Economy, University of Chicago Press, vol. 55(2), pages 152-152.
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    1. Di Vita, Giuseppe, 2001. "Are the outputs derived from secondary materials giffen goods?," Resources Policy, Elsevier, vol. 27(4), pages 255-260, December.
    2. Miller, Anne, 2023. "Demand Theory for Poverty and Affluence: A Contribution to Utility Theory," MPRA Paper 117618, University Library of Munich, Germany, revised 13 Jun 2023.
    3. Miller, Anne, 2024. "The Concept of Separate needs in Cardinal Utility Theory: A Functional Form for Added Leaning-S-shaped Utlities," MPRA Paper 121455, University Library of Munich, Germany.
    4. Miller, Anne, 2022. "Demand theory for poverty and affluence," MPRA Paper 116144, University Library of Munich, Germany.
    5. Jean-Pascal Simonin, 1988. "Sur une conséquence paradoxale du paradoxe de Giffen. Application à la crise de la pomme de terre en Irlande au XIXe siècle," Revue Économique, Programme National Persée, vol. 39(2), pages 391-404.
    6. Miller, Anne, 2024. "The concept of separate needs in cardinal utility theory: the leisure-consumption choice," MPRA Paper 121671, University Library of Munich, Germany.
    7. P. G. Moffatt & H. K. Moffatt, 2014. "Giffen Goods and their Reflexion Property," Manchester School, University of Manchester, vol. 82(2), pages 129-142, March.
    8. Peter Moffatt & Keith Moffatt, 2011. "Mirror utility functions and reflexion properties of various classes of goods," University of East Anglia Applied and Financial Economics Working Paper Series 031, School of Economics, University of East Anglia, Norwich, UK..
    9. Masaki Fujimoto, 2022. "Giffen behavior and duality from the viewpoint of the relation between the shapes of price indifference and indifference curves," SN Business & Economics, Springer, vol. 2(11), pages 1-20, November.

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