References (21)



A Test of the Conspicuous-Consumption Model Using Subjective Well-Being Data

Ricardo Perez-Truglia

Microsoft Research

May 2013

According to the conspicuous-consumption theory, people consume highly observable goods to signal their wealth to others. A growing body of evidence favors this signaling model. However, the empirical evidence available is still far from conclusive; thus, we provide evidence from a new angle. We show that the signaling model of conspicuous consumption predicts that a consumer’s well-being should increase based on his or her household’s ranking of observable consumption within its reference group, but should not be affected by its ranking in the distribution of unobservable consumption. We test this prediction using panel data on household expenditure and subjective well-being. Our evidence is consistent with the predictions of the signaling model.

Number of Pages in PDF File: 20

Keywords: conspicuous consumption, signaling, subjective well-being

JEL Classification: D60, D12

Open PDF in Browser Download This Paper

Date posted: September 28, 2011 ; Last revised: May 10, 2013

Suggested Citation

Perez-Truglia, Ricardo, A Test of the Conspicuous-Consumption Model Using Subjective Well-Being Data (May 2013). Available at SSRN: http://ssrn.com/abstract=1934007 or http://dx.doi.org/10.2139/ssrn.1934007

Contact Information

Ricardo Perez-Truglia (Contact Author)
Microsoft Research ( email )
One Memorial Drive, 14th Floor
Cambridge, MA 02142
United States
HOME PAGE: http://research.microsoft.com/en-us/people/rtruglia/
Feedback to SSRN

Paper statistics
Abstract Views: 1,276
Downloads: 274
Download Rank: 80,440
References:  21

© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollobot1 in 0.188 seconds