![]() ![]() That’s because purchasing decisions are based mainly on how an outsider sees an individual. This concept influences individual consumption behavior. These two factors are a reflection of the cultural class and socio-economic conditions in which they live.Ĭonspicuous consumption represents the perception of a person. It leads to conspicuous consumption because people believe they will achieve a positive self-image when buying the item.įurthermore, according to Veblen, people consume conspicuously for two main reasons to be recognized by their peers and to attain a higher social status in society. When a product is advertised as a branded item, many people want to associate themselves with the product. In this case, they believe property determines the public image and makes up for their shortcomings.Īnother reason is the influence of advertising. People use luxury items to hide their personal insecurities. Other experts attribute conspicuous consumption to individual insecurity. Therefore, people compete with each other for these items. Ownership of luxury goods expresses the superiority of the owner over others. Some experts argue that it is due to the competitive nature of individuals. Many theories explain why people consume conspicuously. For example, when a person is in a high position, his colleagues might suggest buying some luxury products. Thus, ownership of these products symbolizes achievement and pride.įurthermore, James Duesenberry argues that people buy goods and services to maintain their self-worth and follow the expectations of those around them. In other words, the more expensive the item, the higher the utility. On the contrary, the price of the product becomes utility itself. This is because prices are not proportional to the basic utility obtained from the consumption of goods. The wealth and luxuries of a person represent the honor and dignity in a society or community.Īlso, Veblen claims that the goods consumed by such people tend to be wasteful. Veblen argues that there is a direct relationship between a person’s property and status in society. Others believe that the things we consume and own show who we are, whether rich or ordinary. Some scholars say it is the result of capitalism, which encourages materialism as society becomes more advanced. There are many reasons why people consume just to show off. In fact, they may already own several watches. ![]() Due to prestige, you save some money so that it is enough to buy an iPhone.Īlso, some of your friends may buy luxury watches just to show off to you. Social status, prestige, or wealth are other motives for the consumption of products.įor example, when your friends use premium smartphones, such as iPhones, you may also buy them, even if you don’t have enough money. Specifically, he examines the upper classes’ consumption behavior that emerged during the second industrial revolution, which promoted their power and social prestige.Īnd, now, the concept applies to all consumers, not just high-end. He views that some consumption behavior is driven more by social factors than by rational economic factors. Thorstein Veblen introduced the term conspicuous consumption in 1899. It also raises doubts about the concept of a welfare economy based on consumers’ rational choice assumptions. However, conspicuous consumption casts doubt on such views. They consider price and income before deciding to buy a product. Consumers tend to be rational in making choices. In conventional concepts, the goal of consumption is to satisfy needs and wants (utility).
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