Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.
In this lesson, we'll learn about conspicuous consumption. We'll look at some examples of luxury goods and what they can say about our real-life buying choices. After the lesson, you'll also have a chance to test your own knowledge of conspicuous consumption with a short quiz.
Introduction to Conspicuous Consumption
Katie and Molly have been the best of friends for many years. They exchange daily phone calls, have lunch at least once a week, and even attend many social events together on the weekends. When it came to money and extravagant possessions, neither Katie nor Molly ever worried about having expensive stuff. However, that changed when Katie met a new friend, Sue, at her child's school.
Sue lived an entirely different life from that of Katie and Molly. In order to score some social points with Sue, Katie started buying pricey jewelry, going on trips, and staying in fancy hotels. Within a few months, Katie even bought a luxury car. Katie was engaging in conspicuous consumption, a type of behavior described by economist and sociologist, Thorstein Veblen, over 100 years ago.
What Is Conspicuous Consumption?
While many of us can relate to the story of Katie and Molly, it's important to define what exactly happened in the example above. Conspicuous consumption is defined as the purchase of goods or services with the intent of broadcasting one's social status and wealth. Conspicuous consumers often buy material goods and services that are too expensive for shoppers of other social classes, or to hide the fact that they are economically disadvantaged or poor. They buy these pricey items to show them off - not because they really need them.
Conspicuous or Veblen Goods
So, what goods are often purchased when someone is involved in conspicuous consumption? Veblen goods are luxury goods that increase in demand as their prices increase. In other words, those who are guilty of conspicuous consumption may buy a good when the price goes up just to show off their spending power. Some other examples of goods that are purchased as status symbols include the following:
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Luxury cars: Cars that fall into this category include a Ferrari, Mercedes Benz, Porsche, or Rolls Royce.
Silverware: A fork made out of stainless steel often serves the same purpose as a fork made out of silver. However, when someone sets the table with real silver, it sends a message about class.
Conspicuous Consumption in Real Life
Let's take what we've just learned about conspicuous consumption and apply it to a real-life scenario: we'll call our conspicuous consumer Trish. Trish is always trying to impress everyone around her. At her daughter's school functions, she wears designer high heels; big, sparkly diamonds adorn her rings, bracelets, and necklaces. Trish participates in the neighborhood carpool and picks up the children in her fancy Bentley. She also hosts after school events for her daughter and her friends where the snacks are served with real silverware. Trish does not need any of these extravagant items but purchases them to make a statement about her class and money.
Any time people purchases luxury goods with the intent of showing them off and broadcasting their desired or real wealth, they are involved in conspicuous consumption. While such people do not need high-end goods, they purchase them anyway to make statements about money and social class. Diamonds, luxury cars, designer clothing, and silverware are just a few items often purchased to demonstrate wealth.
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