Giffen Good vs Veblen Good
Giffen Good and Veblen Good are two Microeconomic Theory concepts in AP Economics that students often mix up. In short: giffen good is a Giffen good is a rare good whose quantity demanded rises when its price rises, violating the law of demand. Meanwhile, veblen good is a Veblen good is a luxury good whose demand increases as its price rises, because the high price signals status. Here is how they compare side by side.
A Giffen good is a rare good whose quantity demanded rises when its price rises, violating the law of demand.
It happens with strongly inferior staple goods when a price increase makes consumers so much poorer in real terms that they buy more of the cheap staple and less of pricier substitutes. The income effect outweighs the substitution effect. Giffen goods are largely theoretical and very rare.
A Veblen good is a luxury good whose demand increases as its price rises, because the high price signals status.
Unlike normal goods, a higher price makes Veblen goods more desirable as symbols of wealth or exclusivity (e.g., designer items). This conspicuous-consumption effect can produce an upward-sloping demand curve over some price range.