Discussion Paper
No. 2020-4 | February 03, 2020
Robert Sproule
The delimitation of Giffenity for the Wold-Juréen (1953) utility function using relative prices: a note

Abstract

  In the study of Giffen behavior or "Giffenity", there remains a paradox. On one hand, the Wold-Juréen (Demand analysis: A study in Econometrics, 1953) utility function has been touted as the progenitor of a multi-decade search for those two-good, particular utility functions, which exhibit Giffenity. On the other hand, there is no evidence that the Wold-Juréen (1953) utility function has ever been fully evaluated for Giffenity, with perhaps one minor exception, Weber (The case of a Giffen good: Comment, 1997). But there, Weber (1997) showed that the Giffenity of Good 1 depends upon the relative magnitude of income vis-à-vis the price of Good 2. Weber’s precondition is so vague that it lacks broad appeal. This paper offers a new and a clear cut precondition for Giffen behavior under the Wold-Juréen (1953) utility function. That is, the author shows that if the price of Good 1 is greater than or equal to the price of Good 2, then Good 1 is a Giffen good.  

JEL Classification:

A22, A23, D11

Links

Cite As

[Please cite the corresponding journal article] Robert Sproule (2020). The delimitation of Giffenity for the Wold-Juréen (1953) utility function using relative prices: a note. Economics Discussion Papers, No 2020-4, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2020-4


Comments and Questions



Anonymous - Referee report
May 04, 2020 - 09:44
see attached file

Robert Sproule - Reply to referee report
June 04, 2020 - 07:43
see attached file