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Status and the demand for visible goods: experimental evidence on conspicuous consumption

Published online by Cambridge University Press:  14 March 2025

David Clingingsmith Open the ORCID record for David Clingingsmith [Opens in a new window]  and
Roman M. Sheremeta
David Clingingsmith*
Affiliation:
Weatherhead School of Management, Case Western Reserve University, 11119 Bellflower Road, Cleveland, OH 44106, USA
Roman M. Sheremeta
Affiliation:
Weatherhead School of Management, Case Western Reserve University, 11119 Bellflower Road, Cleveland, OH 44106, USA Economic Science Institute, Chapman University, One University Drive, Orange, CA 92866, USA
*
dlc43@case.edu; david.clingingsmith@gmail.com
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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.

Keywords

StatusConspicuous consumptionExperiment

JEL classification

C91: Laboratory, Individual Behavior
Type
Original Paper
Information
Experimental Economics , Volume 21 , Issue 4 , December 2018 , pp. 877 - 904
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-017-9556-x) contains supplementary material, which is available to authorized users.

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