These are goods with the characteristic that a fall in price leads to a fall in quantity demanded. There are certain goods especially foodstuffs (necessities) which are consumed by low income earners in combination with expensive goods. For instance, poor people buy inferior quality of food like maize instead of superior quality of food like rice. If the price of maize falls, then poor people will prefer to buy some rice instead of maize. In this case, when the price of maize falls, its demand will decrease. As the price rises, consumers cling to the giffen goods and reduce the consumption of the relatively more expensive commodities e.g. ugali is eaten with roast meat – if the price of maize meal goes up, consumers may buy more of it and reduce the consumption of roast meat. Therefore, giffen goods are inferior goods.
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