Hi Alex,
I cannot point with conviction to any example of a Giffen
consumption good and I don't consider it to be a very important
consideration. My claim was not that any demand curves _do_ slope up,
but that you want your students to know that it is a logical possibility
and what is required for it to be true if for no other reason than to
innoculate them against arguments that they may later here that assume
only income effects. Also, I always make a point of mentioning Veblen
goods since I do think that that is a real (though not very important)
phenomena. I always found that if I didn't mention Veblen goods someone
in the class would always raise the issue of snob appeal.
When I taught principles I would always integrate policy relevant
examples into all my discussions and not wait to the end of the course
to cover "topics." For every concept I would give them a real world
application of it. For i&s I did labor supply and income taxes. - -
Bill
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
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AOL IM: wtdickens
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I do agree that one of the few applications of i. and s. effects is
to
labor supply (this was mentioned in my first post). (This is because
labor is one of the few goods where the income effect is likely to be
large.) Hence that is the context in which I teach the material. It is
appalling, therefore, that most textbooks teach i. and s. effects early
on and leave labor supply to an entirely different part of the text.
Bill, do you really mean to say that you think that Giffen goods are a
real phenomena???! Even the classic, Irish potato famine has much
better
explanations (e.g. Rosen recent JPE) than in terms of Giffen goods.
As to what to teach instead there are many choices e.g. most
intermediate classes don't cover the Coase theorem or any law and
economics, finance is another topic that could be taught more at the i.
level.
Alex
--
Alexander Tabarrok
Department of Economics, MSN 1D3
George Mason University
Fairfax, VA, 22030
Tel. 703-993-2314
Web Page: http://mason.gmu.edu/~atabarro/
and
Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621
Tel. 510-632-1366
