Expenditure Visibility and Consumer Behavior: New Evidence

60 Pages Posted: 24 Sep 2018 Last revised: 10 Oct 2018

See all articles by Ori Heffetz

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; The Hebrew University of Jerusalem - Department of Economics and Center for Rationality; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: October 7, 2018

Abstract

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

Heffetz, Ori, Expenditure Visibility and Consumer Behavior: New Evidence (October 7, 2018). Available at SSRN: https://ssrn.com/abstract=3243791 or http://dx.doi.org/10.2139/ssrn.3243791

Ori Heffetz (Contact Author)

Cornell University - S.C. Johnson Graduate School of Management ( email )

324 Sage Hall
Ithaca, NY 14853
United States

The Hebrew University of Jerusalem - Department of Economics and Center for Rationality

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/~heffetz

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