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RE: Economic Concepts - Giffen Goods (Video)

in #economics7 years ago

My answers to the questions are:

  1. B (wheat flour)
  2. B (Good C is inferior, all others are normal)

There was actually a study done in China to analyze Giffen behaviors with certain staples as part of an effort to study welfare programs. The study involved subsidizing rice in Hunan province and wheat [flour] in Gansu province, the staple crops of those two areas. The research paper is an interesting read, and can be found here. That's also how I figured out wheat flour was most likely to be a Giffen good... although if it were left strictly to my own personal tastes, I'd go with the Domino's pizza as a Giffen good.

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The paper also says that, they found "weaker evidence for [Giffen behaviour of] wheat in Gansu" and that in the the estimation, "none of the cases are the coefficients statistically significant" at the 5% level.