tegengiffen

Tegengiffen, or Giffen goods, is a concept in economics describing a type of inferior good for which a higher price leads to a higher quantity demanded, violating the law of demand. This occurs when the income effect dominates the substitution effect because the good forms a large share of the consumer's budget and there are few close substitutes. This typically applies in the short run to staple foods for low-income households.

Mechanism: When price rises, real income drops; if the household has limited alternatives, it may cut spending on more expensive foods and buy more of the cheaper staple to maintain caloric intake, increasing quantity demanded of the staple despite higher price. The effect is observed only over a limited price range and is not a general property of all inferior goods.

Examples and evidence: The original idea is credited to economist Sir Robert Giffen and was widely discussed by Alfred Marshall. Actual real-world empirical evidence is scarce and contested; some historical cases (e.g., staple foods in famine or extreme poverty) may show Giffen behavior, but robust demonstration is difficult due to confounding factors. Many economists argue that genuine Giffen goods are rare.

Implications: The concept illustrates that the law of demand can fail under certain conditions; it emphasizes the relationship between income effect, substitution effect, and consumer budget shares.

See also: Giffen good, law of demand, inferior good, income effect, substitution effect.