Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214841
Authors: 
Sproule, Robert A.
Year of Publication: 
2020
Series/Report no.: 
Economics Discussion Papers No. 2020-4
Abstract: 
In the study of Giffen behavior or "Giffenity", there remains a paradox. On one hand, the Wold-Juréen (Demand analysis: A study in Econometrics, 1953) utility function has been touted as the progenitor of a multi-decade search for those two-good, particular utility functions, which exhibit Giffenity. On the other hand, there is no evidence that the Wold- Juréen (1953) utility function has ever been fully evaluated for Giffenity, with perhaps one minor exception, Weber (The case of a Giffen good: Comment, 1997). But there, Weber (1997) showed that the Giffenity of Good 1 depends upon the relative magnitude of income vis-à-vis the price of Good 2. Weber's precondition is so vague that it lacks broad appeal. This paper offers a new and a clear cut precondition for Giffen behavior under the Wold-Juréen (1953) utility function. That is, the author shows that if the price of Good 1 is greater than or equal to the price of Good 2, then Good 1 is a Giffen good.
Subjects: 
Slutsky decomposition
Giffen paradox
Wold-Juréen (1953) utility function
JEL: 
A22
A23
D11
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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