Buffett’s Veblen buffet

Whilst it seems that a dinner with the legendary investor Warren Buffett still retains its Veblen good features (when peoples’ preference for buying a good increases as a direct function of its price, instead of decreasing according to the standard laws of demand); it seems that it also has an inelastic YED, with the credit crunch having a limited impact.

Most of us would would consider a $1.7 million dinner to be a high luxury good, and thus when the economy plummeted, with the concomitant falls in income, demand for the dinner would also plummet.  But it seems that despite the credit crunch, the auction generated the second-highest bid ever.  One possible explanation for this is that in the world of $1.7 million dinners, for the people who actually have the effective demand for such a good, income levels are so high, the good is perceived to be a normal good and the YED for this product is actually very inelastic - which would explain why the auction was still so successful this year.

Martin Wolf on Global Shocks [10 Feb 2012]
Russia’s monopoly power over gas supplies [5 Feb 2012]
Unit 2 Macro: Focus on China - Inflation [26 Jan 2012]
Unit 2 Macro: Focus on China - Per Capita Incomes [26 Jan 2012]
Unit 4 Macro: Focus on India - World’s Cheapest Computer [26 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Hopes and Fears 2012 [10 Jan 2012]
Unit 3 Micro: Brand Loyalty in Mobile Phones [27 Nov 2011]
Beyond the Bike - What is the value of life in Africa? [19 Nov 2011]
Pasty Prices - Something to Chew Over [19 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Unit 1 Micro: Luxury Goods in Action! [6 Nov 2011]
Unit 3 Micro: Time of Use Pricing for Energy [2 Nov 2011]
Unit 3 Micro: Economies of Scale and the Kinect [31 Oct 2011]
Unit 1 Micro: Google Maps to Charge for Usage [31 Oct 2011]
Unit 3 Micro: Price Discrimination in the E-Book Market [31 Oct 2011]
Unit 1 Micro: Is the Sun Dipping on Solar Subsidies? [27 Oct 2011]
Unit 1 Micro: University fees and elasticity of demand [24 Oct 2011]
Unit 1 Micro: Economists attack food price speculation [24 Oct 2011]
Unit 2 Macro: Economic Importance of Investment [19 Oct 2011]
Unit 3 Micro: Tesco Behaving Badly - Price Anchoring [17 Oct 2011]
From Harrods to Poundland… [17 Oct 2011]
Unit 2 Macro: Positive and Negative Multiplier Effects [14 Oct 2011]
Unit 2 Macro: Can Exports Drive a Recovery? [13 Oct 2011]
Unit 2 Macro: UK suffers a weak recovery [12 Oct 2011]
Unit 2 Macro: Homework Assignment on Consumer Spending [3 Oct 2011]
Unit 1 Micro: Homework Assignment on Market Prices [2 Oct 2011]
Unit 1 Micro: The Supply and Demand Rap! [28 Sep 2011]
Unit 1 Micro: Exercise on Equilibrium Market Prices [27 Sep 2011]
Putting the “discrimination” into price discrimination! [26 Sep 2011]
Unit 1 Micro: Exercise on Market Demand [25 Sep 2011]
Unit 2 Macro: Value Added in Production and GDP [11 Sep 2011]
NHS spending good, private provision bad? [5 Sep 2011]
Unit 4 Macro: Baltic Dry Index and Global Weakening [19 Aug 2011]
Unit 1 Micro: The Price of Football [2 Aug 2011]
Unit 1 Micro: Cotton Prices and the Retail Price of Clothing [13 Jul 2011]
Unit 1 Micro: Economics of Volatile Corn Prices [12 Jul 2011]
Unit 2 Macro: Reducing Unemployment after a Recession [11 Jul 2011]
Unit 1 Micro: FirstBuy, Affordability and Effective Demand in Property [10 Jul 2011]
Unit 1 Micro: High price of petrol drains demand [9 Jul 2011]
A2 Macro: Consumer Spending [30 May 2011]
Lady Gaga and Baby Food! [29 May 2011]
Macro Revision: Putting Things in Context [25 May 2011]
AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Economic Recovery [23 May 2011]
AS Macro Key Term: Recession [23 May 2011]
AS Macro Key Term: Spare Capacity [23 May 2011]
AS Macro Key Term: The Output Gap [23 May 2011]
A2 Micro: Price Discrimination [19 May 2011]
A2 Micro:  Monopsony Power in Markets [19 May 2011]
A2 Micro: The Importance of Profit [19 May 2011]
A2 Micro: High and Low Marginal Cost Products [19 May 2011]
A2 Micro: Examples of Price Discrimination [19 May 2011]
A2 Micro: Perfect Competition [19 May 2011]
A2 Micro: Competition and Efficiency [19 May 2011]
A2 Micro: Innovation and Economic Policies [18 May 2011]
A2 Micro: Innovation Efficiency and Welfare [18 May 2011]
A2 Micro: Minimum Efficient Scale [18 May 2011]
AS economics: Using the cost-benefit principle [18 May 2011]
The economics of price gouging after a natural disaster. [16 May 2011]
AS Micro: What´s really behind the oil price rise? [10 May 2011]
Interest Rates Held at 0.5% once again [5 May 2011]
AS Micro: Commodity Prices [5 May 2011]
AS Macro: Extended House Price Deflation? [5 May 2011]
AS Micro: Rising Global Food Prices [2 May 2011]
AS and A2 Macro Revision: Keynesian Economics [28 Apr 2011]
A2 Micro: EU Aviation - State Aid and State Ownership [28 Apr 2011]
AS Micro: Mock Exam Question on Sugar Prices [28 Apr 2011]
Wiki Revision: A to Z on Monopoly [23 Apr 2011]
AS Micro: Importance of Elasticity of Supply [23 Apr 2011]
AS Micro Revision: Public and Private Goods [21 Apr 2011]
Key AS Micro Terms: Taxes and Subsidies [18 Apr 2011]
Key AS Micro Terms: Costs and Profits [16 Apr 2011]
Smartphones and Creative Destruction [16 Apr 2011]
Key AS Micro Terms: Prices [15 Apr 2011]
AS Macro Key Term: Seasonal Unemployment [10 Apr 2011]
AS Macro Key Term: Double-Dip Recession [8 Apr 2011]
AS Macro Key Term: Fiscal Austerity [6 Apr 2011]
Information Failures: Tesco and Second Hand Cars [3 Apr 2011]
AS Macro Key Term: Current Account Deficit [2 Apr 2011]
AS Macro Key Term: Relative deflation [2 Apr 2011]
AS Micro Revision: Banana Prices [1 Apr 2011]
OCR F585 June 2011: Competitiveness [31 Mar 2011]
OCR F585 June 2011: Data Charts [30 Mar 2011]
Keeping Track of UK Macro Objectives [18 Mar 2011]
Timetric: Mortgage Lending and Mortgage Rates [14 Mar 2011]
Timetric: UK Consumption as a Share of GDP [12 Mar 2011]
AS Macro Revision: Investment Spending [12 Mar 2011]
A virtuous circle of recovery - Paul Krugman [6 Mar 2011]
Information Failure: The UK Illicit Drug Market [28 Feb 2011]
Information Failures: Health Warnings on Cigarette Packets [27 Feb 2011]
The World’s Largest Yachts [17 Feb 2011]
Economics solar power government subsidies [8 Feb 2011]
Ways to watch movies - cross elasticity of demand in action! [3 Feb 2011]
EU Economics: Hopes for a low carbon future in Europe [3 Feb 2011]
An Aggregate Supply puzzle [24 Jan 2011]
Shorting the market - the vultures target HMV [23 Jan 2011]
Economics Q&A: Will the rise in VAT harm the UK’s economic performance? [17 Jan 2011]
Economics Q&A: How might rising food prices affect food retailers and manufacturers in the UK? [16 Jan 2011]
A Motorbiking Triumph [13 Jan 2011]

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