A well of Giffen is defined by the following conditions:

1. it is a lower Bien,

2. it does not exist Bien substitute available,
3. it represents a considerable percentage of the income of the purchaser.

If the first condition is replaced by “the good must be so lower than the effect of the income is stronger than the substitution effect”, then these three conditions are sufficient and necessary.

The case of the good of Giffen is found when the income is very weak and that the price the least expensive of the good is still too expensive for the consumer.

History

Robert Giffen discovered this type of good by studying the behavior of the Irishmen following a rise of the Prix of the potatoes. It noted that the Purchasing power of people decreased at the same time as the price of potatoes increased. That affected their consumption: it consumed less other types of goods but more potatoes because that remained the good all the same the least expensive.

References

• Alfred Marshall Principles off Economics Bk.III, Ch.VI in paragraph III.VI.17