Getting Ahead of the Joneses: When Equality Increases Conspicuous Consumption among Bottom-Tier Consumers

Abstract

It is widely believed that increasing the equality of material possessions or income in a social group should lead people at the bottom of the distribution to consume less and save more. However, this prediction and its causal mechanism have never been studied experimentally. Five studies show that greater equality increases the satisfaction of those in the lowest tier of the distribution because it reduces the possession gap between what they have and what others have. However, greater equality also increases the position gains derived from status-enhancing consumption, since it allows low-tier consumers to get ahead of the higher proportion of consumers clustered in the middle tiers. As a result, greater equality reduces consumption when consumers focus on the narrower possession gap, but it increases consumption when they focus on the greater position gains (i.e., when consumption is conspicuous, social competition goals are primed, and the environment is competitive).

The local Joneses: Household consumption and income inequality in large metropolitan areas

“…By these accounts, lavish spending at the top causes unsustainably high consumption standards to trickle down the economic ladder. The increased spending may motivated by efforts to gain status distinction or simply to fit in with perceived socioeconomic peers (Ordabayeva & Chandon, 2010). The income and inequality effects are not mutually exclusive, and we in fact find both.…”

“…Since effects of MSA income level are concentrated at the bottom of the socioeconomic ladder, we suspect that they reflect defensive efforts to "fit in" and adapt to local standards of decency, more than efforts to gain status distinction in the broader community (Pugh, 2009). It is possible, however, that status is garnered within households' specific socioeconomic reference groups and that this interpersonal distinction is an important motivator (Ordabayeva & Chandon, 2010).…”

She Said, She Said: Differential Interpersonal Similarities Predict Unique Linguistic Mimicry in Online Word of Mouth

“…This prediction is based on two lines of work. First, being similar in status to others can activate a motivation to display (or affirm) one's own status (Ordabayeva and Chandon 2011;Charles and Lundy 2013;Kuziemko et al 2014). Second, in an online context, status information such as tenure, posting frequency, or review helpfulness indicates that an individual has successfully participated in the community, providing needed and useful information (Pendry and Salvatore 2015).…”

All That is Users Might Not be Gold: How Labeling Products as User Designed Backfires in the Context of Luxury Fashion Brands

“…First, mainstream brands are typically not positioned around upper-class clientele; therefore, status signaling and agentic feelings are typically less relevant to the respective purchase decision. Second, mainstream brand customers may appreciate user design because it could make them feel closer to likeminded others, thus triggering communal feelings (e.g., Han, Nunes, and Drèze 2010;Locke 2003;Ordabayeva and Chandon 2011). Third, the respective design equity of mainstream brands is typically lower than that of luxury brands, which suggests that people may perceive userdesigners to be more comparable to mainstream designers with respect to ability and output.…”