TY  - JOUR
AU  - Jensen,Robert T.
AU  - Miller,Nolan H.
TI  - Giffen Behavior: Theory and Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13243
PY  - 2007
Y2  - July 2007
UR  - http://www.nber.org/papers/w13243
L1  - http://www.nber.org/papers/w13243.pdf
N1  - Author contact info:
Robert T. Jensen
UCLA School of Public Affairs
3250 School of Public Affairs Building
Box 951656
Los Angeles, CA 90095-1656
Tel: 310-825-9865
Fax: 310-206-0377
E-Mail: robertjensen@ucla.edu

Nolan H. Miller
College of Business
University of Illinois at Urbana Champaign
4033 BIF
515 East Gregory Drive
Champaign, IL 61820
Tel: 217/244-2847
E-Mail: nmiller@illinois.edu
AB  - This paper provides the first real-world evidence of Giffen behavior, i.e., upward sloping demand. Subsidizing the prices of dietary staples for extremely poor households in two provinces of China, we find strong evidence of Giffen behavior for rice in Hunan, and weaker evidence for wheat in Gansu. The data provide new insight into the consumption behavior of the poor, who act as though maximizing utility subject to subsistence concerns, with both demand and calorie elasticities depending significantly, and non-linearly, on the severity of their poverty. Understanding this heterogeneity is important for the effective design of welfare programs for the poor.
ER  -