3 ms·
Those are not examples of true Veblen goods but rather goods which use price as a signal of quality. True Veblen goods are things like staple foods for the very
by LaEc 6y ago
Those are not examples of true Veblen goods but rather goods which use price as a signal of quality. True Veblen goods are things like staple foods for the very poor where the increase in price eats so much of their income that they can only buy more staple foods.
- opo 6y agoYou are thinking of a Giffen good. A Veblen good: >...A higher price may make a product desirable as a status symbol in the practices of conspicuous consumption and conspicuous leisure. A product may be a Veblen good because it is a positional good, something few others can own. https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good A Giffen good: >...The classic example given by Marshall is of inferior quality staple foods, whose demand is driven by poverty that makes their purchasers unable to afford superior foodstuffs. As the price of the cheap staple rises, they can no longer afford to supplement their diet with better foods, and must consume more of the staple food. https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good