Expenditure Visibility and Consumer Behavior: New Evidence
60 Pages Posted: 24 Sep 2018 Last revised: 10 Oct 2018
Date Written: October 7, 2018
Expenditure visibility—the extent to which a household’s spending on a consumption category is noticeable to others—is measured in three new surveys, with ~3,000 telephone and online respondents. Visibility shows little change across time (ten years) and survey methods. Four different notions, or dimensions, of visibility are measured: the noticeability of above-average spending on a category; that of below-average spending; and the positivity/negativity of impressions made by above- and below-average spending. Jointly, these visibility measures explain up to three quarters or more of the observed variation in total-expenditure elasticities across consumption categories in U.S. data. Possible theoretical explanations are explored.
Keywords: expenditure visibility, noticeability, impressions, conspicuous consumption, Engel curves, income elasticities, luxury goods, household data, surveys
JEL Classification: D12, D83, D91, Z13
Suggested Citation: Suggested Citation