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Status and the Demand for Visible Goods: Experimental Evidence on Conspicuous Consumption

Author

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  • Clingingsmith, David

    (Case Western Reserve University)

  • Sheremeta, Roman M

    (Case Western Reserve University)

Abstract
Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare

Suggested Citation

  • Clingingsmith, David & Sheremeta, Roman M, 2017. "Status and the Demand for Visible Goods: Experimental Evidence on Conspicuous Consumption," SocArXiv vjz2q, Center for Open Science.
    • Handle: RePEc:osf:socarx:vjz2q
    DOI: 10.31219/osf.io/vjz2q
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    Cited by:

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    2. Anya Samek & Roman M. Sheremeta, 2017. "Selective Recognition: How to Recognize Donors to Increase Charitable Giving," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1489-1496, July.
    3. Roman M. Sheremeta, 2016. "The pros and cons of workplace tournaments," IZA World of Labor, Institute of Labor Economics (IZA), pages 302-302, October.
    4. Julia Knaggs & J. Ross Pruitt & Lindsay Anderson & Marco Palma, 2022. "Influence of social status, physical activity, and socio-demographics on willingness to pay for a basket of organic foods," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-14, December.
    5. Schmal, W. Benedikt & Haucap, Justus & Knoke, Leon, 2023. "The role of gender and coauthors in academic publication behavior," Research Policy, Elsevier, vol. 52(10).
    6. Pedro Rey-Biel & Roman Sheremeta & Neslihan Uler, 2018. "When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 167-203, Emerald Group Publishing Limited.
    7. Banuri, Sheheryar & Nguyen, Ha, 2023. "Borrowing to keep up (with the Joneses): Inequality, debt, and conspicuous consumption," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 222-242.
    8. Adam Ayaita & Kerstin Pull, 2022. "Positional preferences and narcissism: evidence from ‘money burning’ dictator games," Applied Economics Letters, Taylor & Francis Journals, vol. 29(3), pages 267-271, February.
    9. Valdez Gonzalez, Natalia I. & Kee, Jennifer Y. & Palma, Marco A. & Pruitt, J. Ross, 2024. "The relationship between monetary incentives, social status, and physical activity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    10. (Charlie) Chen, Zhuoqiong & Ong, David & Sheremeta, Roman, 2022. "Competition between and within universities: Theoretical and experimental investigation of group identity and the desire to win," Journal of Economic Psychology, Elsevier, vol. 93(C).
    11. Antonia Grohmann & Sahra Sakha, 2019. "The effect of peer observation on consumption choices: evidence from a lab-in-field experiment," Applied Economics, Taylor & Francis Journals, vol. 51(55), pages 5937-5951, November.
    12. Montano-Campos, Felipe & Perez-Truglia, Ricardo, 2019. "Giving to charity to signal smarts: evidence from a lab experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 193-199.
    13. Manuel Staab, 2023. "Evolution of Risk-Taking Behaviour and Status Preferences in Anti-coordination Games," Dynamic Games and Applications, Springer, vol. 13(4), pages 1320-1342, December.
    14. Florian H. Schneider, 2020. "Signaling ideology through consumption," ECON - Working Papers 367, Department of Economics - University of Zurich, revised Jul 2022.
    15. Gustavo Barrera Verdugo & Héctor R. Ponce, 2023. "Gender Differences in Millennial Consumers of Latin America Associated with Conspicuous Consumption of New Luxury Goods," Global Business Review, International Management Institute, vol. 24(2), pages 229-242, April.

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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