The Psychological Economics of Conspicuous Consumption

Mason, Roger

doi:10.1007/978-94-011-7775-7_10

Cited by 17 publications

(18 citation statements)

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“…Early work arguing that conspicuous consumption is limited to the upper classes of developed countries (Mason 1998) has been refuted by a number of empirical studies. These studies have demonstrated significant conspicuous spending among the lowincome and racial minorities (e.g., Charles et al 2009;Harriger 2010) in developed countries as well as among the poor in developing countries (Banerjee and Duflo 2011;Anderson 2003;Case et al 2013;Guillen-Royo 2011;Jin et al 2011;Linssen et al 2011).…”

Section: Relationship In An Emerging Economy: Case Of Indiamentioning

confidence: 99%

Conspicuous consumption and income inequality in an emerging economy: evidence from India

Jaikumar

Sarin

2015

Mark Lett

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The impact of income inequality on conspicuous consumption has been a topic of much discussion, but little empirical examination in the emerging market context. In this paper, using data from the India Human Development Survey (2004)(2005) and employing simple regression framework, we examine the effect of income inequality on conspicuous consumption in Indian households. We also empirically examine whether the relationship between inequality and conspicuous consumption changes with a household's relative wealth status. Drawing on existing literature, we hypothesize that low-income and rural groups are likely to engage in higher conspicuous consumption due to the reduced attractiveness of alternate mechanisms to signal status (like professional titles and educational qualifications) as well as the absence of well-functioning financial institutions that might inhibit Bstatus seeking^savings. Consistent with this hypothesis, our results suggest that increased income inequality is associated with an increased spending on conspicuous consumption as a share of total spending, with the associated response being higher for relatively low-income households and those living in rural settings. Our findings have significant policy and marketing implications in emerging markets like India.

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Section: Relationship In An Emerging Economy: Case Of Indiamentioning

confidence: 99%

Conspicuous consumption and income inequality in an emerging economy: evidence from India

Jaikumar

Sarin

2015

Mark Lett

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“…From a logical point of view (and contrary to what some people think [e.g., Mason 1987]), a single individual's choice is easier to explain than a market demand curve. This is because in consumer theory we can treat the prices and income facing the individual as exogenous variables leaving only the consumer's choice as the endogenous variable to explain.…”

Section: Individualism and The Legacy Of 18th Century Rationalismmentioning

confidence: 83%

Individualist Economics Without Psychology

Boland¹

1988

Psychological Economics

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“…To understand some of the possible reasons for marketing's lack of theory development, the paper briefly examines the basis of neoclassical consumer theory nored any social influence on consumption patterns. 20 Modern neoclassical economics owe much to the work of Marshall and to be fair to him, he was aware of such criticisms. Basically, the tastes and preferences of a consumer are reduced to ceteris paribus clauses.…”

Section: Neoclassical Consumer Theory and The Social Contextmentioning

confidence: 97%

“…Patten, for example, in 1892 was critical of Jevons, one of the founding fathers of neoclassical economics, for '...using a theory of consumption which bore no relation to observed market behaviour'. 20 Also Schumpeter, in 1909, argued that utility theory was too narrow to be of any practical use, particularly as it igthe nonprofit sector include cases when their very aim is to avoid a market outcome, for example famine relief. The market solution in this case would be that once sufficient numbers have starved, the problem is solved and there is sufficient food for those left.…”

Section: Neoclassical Consumer Theory and The Social Contextmentioning

confidence: 98%