Theoretical Analysis and Case Study of Giffen Effect in Commodity and Labor Market

Abstract

The Giffen effect is a particular economic phenomenon that only occurs in a specific background. Due to its effect on both commodity and labor markets, the Giffen effect became an irreplaceable phenomenon in the development of economy and society. Despite the fact that it is a rare incidence, it still can be found in daily life. Under the circumstance of COVID-19, the mask is a quintessential example of the Giffen goods. At the same time, the mask provides a more tangible explanation of the Giffen effect. This study mainly focuses on explaining the Giffen effect and its influence on the commodity and labor market. Furthermore, the paper also helps to illustrate the real-life example of Giffen goods. The terminal goal of the study is to explore the effects of Giffen goods, and provide others about the idea of the Giffen effect and figure out its main characters. This study also provides a reference for researchers who are interested in this area and willing to spend more time exploring it.