SIDE EFFECTS OF FOOD-SUPPLY POLICY
Grain Was a Giffen Good
Bread, or cereals more generally, constituted the basic indispensable foodstuff. Under normal circumstances, there were no acceptable substitutes for them. The elasticity of demand was minimal. If the price rose, people went sparingly with other expenditure, such as that on pulmentarium, in other words what was eaten with bread; or they drank less wine. So their intake of calories, from sources other than grain, was reduced; and they were constrained to eat more of it. Grain was a Giffen good—that is to say, one for which demand paradoxically rises when its price rises.
The consequence of this is that demand for other foodstuffs largely depends on the price of cereals. Fluctuations in the price of wheat cause greater fluctuations in prices for wine, oil, fish, and fruit. By ensuring that the troops got their ration of grain at a price independent of the market and by regularly doling it out free to 150,000 inhabitants of Rome, the state contributed in a major way to the regularization of the market for other foodstuffs. It afforded security to producers and traders; and it had a stimulus effect on exports to the populations so favoured.
-  In addition to standard works on economics, see Grenier (1996: 307-15).