Not all Giffen Goods, are Inferior Goods
Author: Vallejo, Hernán
Publication date: 2021
Content type: document
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.
Files in this item