VEBLEN and GIFFEN Goods are special kinds of goods that act a little differently when we buy them, like how some toys get more fun when you have fewer of them!
What Makes VEBLEN Goods Special?
Imagine you really want that shiny new toy, but it costs a lot of your allowance. You might not buy it at first because it's too expensive. But if the price goes up even more, like from $10 to $20, suddenly it feels more exclusive and more cool, so you decide to buy it after all!
That’s what happens with VEBLEN Goods: people sometimes buy them more when they get more expensive, because they feel fancy or special.
What Makes GIFFEN Goods Special?
Now imagine you only have a little bit of money, and you need bread to eat. If the price of bread goes up, like from $1 to $2, you might not be able to buy as much of it, so you end up buying less bread even though you really want it.
That’s what happens with GIFFEN Goods: people sometimes buy them less when they get more expensive, especially if they don’t have a lot of money.
Examples
- A child buys a second toy even though they already have one, just because it's more expensive.
- A person keeps buying expensive coffee despite cheaper alternatives available.
- Someone spends more on a brand-name shirt than a generic one, even if the generic is much cheaper.
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See also
- What is Price Effect?
- How Does Shrinkflation Explained | Think Econ Work?
- What is demand?
- What are unlimited wants and needs?
- Who is Consumer Behavior?