Not all Giffen Goods, are Inferior Goods

23 Pages Posted: 26 Mar 2021

Date Written: March 24, 2021

Abstract

It is well known in the economic literature that the labor supply curve can bend backwards and, therefore, that leisure can be a Giffen good. It is also known that leisure can be a normal good. This article proves that if leisure is a Giffen good, it has to be a normal good. This result also proves that, contrary to common knowledge in economics, not all Giffen goods, are inferior goods. The results presented here could be taken into account, for example, when finding empirical evidence and designing policies on labor supply, in an era of machine learning and artificial intelligence.

Keywords: Leisure, labor supply, Giffen Goods, Ordinary Goods, Normal Goods, Inferior Goods

JEL Classification: D01, D04, D11, J22, J38

Suggested Citation

Vallejo, Hernan, Not all Giffen Goods, are Inferior Goods (March 24, 2021). Documento CEDE No. 11, Available at SSRN: https://ssrn.com/abstract=3811748 or http://dx.doi.org/10.2139/ssrn.3811748

Hernan Vallejo (Contact Author)

Universidad de los Andes ( email )

Carrera 1a No. 18A-10
Bogota
Colombia
57-1-3394949 (Phone)
57-1-3324492 (Fax)

HOME PAGE: http://economia.uniandes.edu.co/vallejo

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
55
Abstract Views
220
rank
445,096
PlumX Metrics