22 Pages Posted: 29 Feb 2012
Date Written: October 1, 2011
In the last decade, events outside the realm of Western economics have been viewed as “paradoxes.” We focus on the Giffen paradox, and argue that Giffenity is consistent with a generalized law of demand. We confirm the occurrence of Giffenity in Russia during the early 1990s. During this period, people reduced consumption of less affordable meat and fish despite a decline in their relative prices, while augmenting their consumption of more affordable potatoes and bread, a significant increase in relative prices of the latter goods notwithstanding. We conclude that incorporating Giffenity into current economic theory will make it more robust.
Keywords: Giffen goods, inferior goods, subsistence, Russia, household
JEL Classification: D1, E2
Suggested Citation: Suggested Citation
Shachmurove, Yochanan and Szyrmer, Janusz M., Giffen Goods in a Transition Economy: Subsistence Consumption in Russia (October 1, 2011). Frontiers in Finance and Economics, Vol. 8, No. 2, pp. 27-48, 2011. Available at SSRN: https://ssrn.com/abstract=2012482