Giffen Paradox and Industrial Development: A Case Study of Family Service Industry in Beijing

Shi Zheng, Shengnan Huang, Zhibin Wang and Zhigang Wang

Chinese Economy, 2016, vol. 49, issue 2, 105-127

Abstract: Giffen Paradox is a phenomenon contrary to common economic theories. This paper explores Giffen Paradox in practice by seeking the existence in the home service industry, with an investigation of home service labor employment behavior of consumers in Beijing. By applying the Heckman Two-Stage Method, we analyzed the data collected and found that when home service prices rise, consumers with previous experience in home servant employment or extra working hours tend to increase employed labor hours, while other variables have limited influence. The study confirms the existence of Giffen Paradox in consumer behaviors and provides policy suggestions to promote home service industry in Beijing.

Date: 2016
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DOI: 10.1080/10971475.2016.1143305

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