VEBLEN GOODS

DEFINITION of 'Veblen Good' A good for which demand increases as the price increases, because of its exclusive nature and appeal as a status symbol. A Veblen good, like a Giffen good, has an upward-sloping demand curve, which runs counter to the typical downward-sloping curve. However, a Veblen good is generally a high-quality, coveted product, in contrast to a Giffen good which is an inferior product that does not have easily available substitutes. As well, the increase in demand for a Veblen good reflects consumer tastes and preferences, unlike a Giffen good, where higher demand is directly attributable to the price increase. The term is named after the American economist Thorstein Veblen, who is best known for introducing the term “conspicuous consumption.”