A good for which demand increases when its price increases, and vice versa. Luxury goods like diamonds, whose appeal depends on their exorbitant price, are an example. It is named after American economist Thorstein Veblen. Veblen goods are considered exceptions to the law of demand, which states that the demand for a good must decrease as its price increases, and vice versa. Some economists disagree, saying that the law applies only to goods that are truly identical. Cheap diamonds, for instance, may be an inferior good in the eyes of the consumer when compared to expensive diamonds; hence they are not truly comparable.
