The Brooks Blog is a top 100 Labour Party blog by Thom Brooks discussing topics in ethics, law & public policy
It is unfortunate the the Guardian writers seem to have no idea what Giffen goods are and that they plagiarize the first sentence of the Wikipedia entry on Giffen goods. They could have at least solved the first problem if they'd bothered to read the rest of the entry.With both politicians and journalists clueless ... sigh.
Any evidence to support this?
1. From the Guardian article: " ... which people paradoxically consume more as the price rises, violating the normal laws of supply and demand." From the Wikipedia entry on Giffen goods: " ... which people paradoxically consume more of as the price rises, violating the law of demand."Granted, it's only a short bit, but it is almost verbatim. The fact that the sentence in the Guardian is rather awkward strengthens the impression of copying and pasting from another source. And I have to say that the fact that they then link to another page on Giffen goods -- one which has no similar language at all -- makes it look worse, not better.2. Giffen goods are goods in which a rise in price results in a negative income effect (nothing unusual so far) but where that negative income effect then leads to higher rather than lower consumption of the good in question. I'm not an economist so maybe I just haven't been clever enough yet, but I don't see how expensive goods like higher education would ever be Giffen goods. All the putative examples I've ever seen have certainly been of cheap staples like rice or potatoes. There the idea is that if, say, rice becomes more expensive, then you'll have less money for expensive foods like meat and so will have to buy even more rice despite its higher price.Higher education is an interesting market, to be sure. Cornell economist Robert H. Frank has a nice piece explaining why it's so different from classical markets here: http://inequality.cornell.edu/publications/working_papers/RobertFrank1.pdf .As for Giffen goods, Freakonomics had a post a while back combatting misuse of the term: http://www.freakonomics.com/2008/12/16/what-do-prostitutes-and-rice-have-in-common/ .
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