[Starvid]

$this->bbcode_second_pass_quote('Wikipedia', 'A') Giffen good is a product for which a rise in price of this product makes people buy even more of the product. Giffen goods may or may not exist in the real world, but there is an economic model that explains how such a thing could exist. Giffen goods are named after Sir Robert Giffen, who was attributed as the author of this idea by Alfred Marshall in his book Principles of Economics.

[...]

Gasoline as a possible Giffen good

Sasha Abramsky conjectures that for some poor Americans who live far from their jobs, the recent (as of 2005) sharp rise in gasoline prices may make gasoline a Giffen good for certain populations of poor Americans. His model is that they will have to spend money on gasoline that otherwise might go for oil changes, tune-ups, minor repairs, or even to upgrade to more fuel-efficient vehicles. The result is that their "older, less well-maintained cars" will have "decreased gas efficiency", resulting in an increase in gasoline consumption. (Abramsky, 2005, 18) This corresponds to the Giffen model, with maintenance and upgrades constituting the superior goods and gasoline the inferior Giffen good.

[NeoPeasant]

I have a lot of trouble being convinced that we must keep fuel prices low so that rural residents can continue to make 40 mile commutes in their pickup trucks to earn minimum wage at the Subway shop. The fact that such things are common just proves that fuel has been much too cheap for too long.
As Kunstler has said, those who choose to live in the country will have to re-adopt traditional country life-ways.

[crapattack]

They might put off doing maintenance for a while, but eventually gas will get so pricey they just won't be able to run their cars period. Older cars won't run for too long without care. Then they'll be carpooling, trying to sell their places or finding jobs more locally (of which their won't be many).

[aahala]

I don't think gasoline quite fits the Giffen concept.

If gas prices rise, then it is reasonable for some consumption will not
decline and the additional expense is funded by reductions elsewhere.
This may limit the conversion to greater efficiency sometime in the future.

This isn't the same thing exactly as increasing consumption, it's maintaining
current consumption levels that might have fallen in the future if there
had been no increase in price.

I think the concept is to compare current consumption with future
consumption, not future consumption of one price with future consumption
of another.