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

54 Pages Posted: 6 Dec 2015

See all articles by David Clingingsmith

David Clingingsmith

Case Western Reserve University

Roman M. Sheremeta

Case Western Reserve University

Date Written: December 4, 2015

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: status, conspicuous consumption, experiment

JEL Classification: C91, D03

Suggested Citation

Clingingsmith, David Lawrence and Sheremeta, Roman M., Status and the Demand for Visible Goods: Experimental Evidence on Conspicuous Consumption (December 4, 2015). Available at SSRN: https://ssrn.com/abstract=2699325 or http://dx.doi.org/10.2139/ssrn.2699325

David Lawrence Clingingsmith (Contact Author)

Case Western Reserve University ( email )

Cleveland, OH 44106
United States

Roman M. Sheremeta

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

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