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Giffen Goods and their Reflexion Property

Manchester School

Published online on

Abstract

The following ‘reflexion property’ of Giffen behaviour is proved: the two‐good direct utility function (DUF) obtained by reversing the sign of two‐good indirect utility function (IUF) displays Giffen behaviour with respect to one of the two goods if and only if the IUF itself displays Giffen behaviour with respect to the other good. A particular IUF showing Giffen behaviour for both goods (in non‐overlapping regions of the price space) is constructed and the reflexion property is verified. The example IUF is extended to more than two goods, and Giffenity is verified in this case.