People have to eat regardless of the economic situation. If they have money, they can eat good and expensive food. If they are short of money, they can eat worse and cheaper food. During the Great Depression, the money spent on food consumption will be reduced, but the total food consumption cannot be reduced.
Potatoes are low-grade and cheap food in food. When people's income decreases, they will buy cheap potatoes, which will lead to a strong overall demand for potatoes, thus pushing up the price of potatoes.
Extended data:
Yuan Qi
British statistician Robert Ji Fen first discovered that there was a famine in Ireland in 1845, and the price of potatoes rose, but the demand for potatoes increased. At that time, this phenomenon was called the "Ji Fen puzzle". Also known as the "potato effect".
In famine-stricken Ireland, potatoes are a very strong low-grade commodity. When the price of potatoes goes up, consumers become poor. The income effect makes consumers want to buy less meat and more potatoes. At the same time, because potatoes are more expensive than meat, the substitution effect makes consumers want to buy more meat and less potatoes.
However, in this special case, the income effect is so great that it exceeds the substitution effect. Therefore, consumers' reaction to potatoes is to buy less meat and more potatoes. According to the law of demand, the quantity of goods or services purchased by consumers generally increases with the increase of prices, and the market demand will decrease.
Jia Xu goods refer to goods whose demand increases due to rising prices. British statistician Robert Ji Fen first discovered that there was a famine in Ireland in 1845, and the price of potatoes rose, but the demand for potatoes increased. At that time, this phenomenon was called the "Ji Fen puzzle".
Marshall, a British economist, discussed this problem in detail in his famous book Principles of Economics (1980), and mentioned Robert Ji Fen's point of view in his analysis, thus making the word "Jia Xu commodity" come down. In famine-stricken Ireland, potatoes are a very strong low-grade commodity.
When the price of potatoes goes up, consumers become poor. The income effect makes consumers want to buy less meat and more potatoes. At the same time, because potatoes are more expensive than meat, the substitution effect makes consumers want to buy more meat and less potatoes.
However, in this special case, the income effect is so great that it exceeds the substitution effect. Therefore, consumers' reaction to potatoes is to buy less meat and more potatoes. This can explain the "Ji Fen mystery", also known as the "potato effect".
Baidu Encyclopedia-Potato Effect