PARADOXES IN ECONOMIC THEORY

GIFFEN’S PARADOX

For the observations of the famous British statistic of XIX century Robert Giffen who was dealing with studying of Iceland people’s consumption structures, the sharp rising of the price of bread didn’t lead to decline of the demand for bread, but contrary, led to increase for demand of it.

The reason of that was: increase of food prices led to simplify of food ration of the people with low income level – preference of cheaper foods with high calorie – bread. So, it led to increase of demand for bread. 

Aghanemat Aghayev