Giffen Goods

Giffen goods are a type of inferior product for which demand increases as the price rises, contrary to typical behavior. This occurs because, when the price of such a good goes up, it negatively affects the consumer's real income, leading them to buy more of that good instead of more expensive alternatives. Essentially, the higher price makes people feel poorer, so they cut back on luxury or substitution items and purchase more of the cheaper, basic good. Giffen goods are rare and are primarily observed in specific economic or historical contexts.