Friday, June 4, 2021

Theory of conspicuous consumption

Conspicuous consumption is the buying of the expensive goods in order to impress people and to show wealth to their members of social class.

It is the public consumption or usage of costly goods, services, or leisure activities out of the conscious or unconscious motive to display or enhance one’s own social status, to indicate one’s ability to pay for it and hence displaying one’s own wealth despite the possibility to consume cheaper alternatives which yield the same functionality.

It probably has existed since humans use goods (e.g., cloth, weapons, music instruments). The term “conspicuous consumption” was introduced by Thorstein Veblen’s (1899), who argued that individuals often consume attention-seeking goods and services to signal their wealth and thereby elevate their social status.

According to Veblen: In order to gain and to hold the esteem of men, wealth must be put in evidence, for esteem is awarded only on evidence.

Fundamental to his “Theory of the leisure class” is the assumption that individuals compare each other on the basis of their economic achievements. Moreover, he emphasized that these interpersonal comparisons are important for human behavior as they constitute the individual’s recognition by others.

By social custom, the evidence consists of unduly costly goods that fall into “accredited canons of conspicuous consumption”, the effect of which is to hold the consumer up to a standard of expensiveness and wastefulness in his consumption of goods and his employment of time and effort.

Studies showed that wearing luxury apparel results in more positive attributions from others and in preferential treatments in everyday social interactions. Surprisingly it also leads to the economically irrational fact that fundraisers on the streets receive more money from passersby when wearing luxury apparel than by wearing ordinary apparel.
Theory of conspicuous consumption

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