An article appeared in the NY Times about one year ago about a mid-level university that had a disappointing number of applicants. The university then decided (apparently paradoxically) to raise tuition rates. The result was a significant INCREASE in the number of applicants. It appears that increasing the tuition changed the perception about the quality of the school. Does enrollment at this school then qualify as a Giffen good? It seems to me that one may argue it either way. The article does not say whether people currently enrolled at the school, that is, already consuming the good, tended to transfer out less. Perhaps only in that case is it a true Giffen good. It appears, rather, that increasing the tuition changed the demand curve for the school altogether.

[NEAS: Some quality items have this attribute. Diamonds priced at $100 a carat won't have much demand because people assume they are low quality. Diamonds priced at $1,000 a carat may have more demand.

A true Giffen good has no change in consumers' perception of the good after the price change. Consumers demand more of the good because they have less money to buy more expensive substitutes. True Giffen goods are rare (though they might exist), and we don't know for sure that any goods are Giffen goods.]