Wealth and Want: Income Inequality and Demand for Luxury Goods in the United States
21 Pages Posted: 16 Feb 2023 Last revised: 28 Apr 2023
Date Written: February 14, 2023
This study investigates the relationship between conspicuous consumption and inequality in the United States by doing text mining in Google searches for luxury and comfort goods. The findings reveal a strong correlation between the pursuit of luxury items and levels of income inequality in states of the United States (U.S.). An increase in average income leads to a parallel increase in inequality, resulting in a heightened inclination for American citizens to demand luxury goods. However, this trend can have negative consequences, such as hindering wealth redistribution policies, affecting savings rates, and increasing criminal activities related to luxury items. The study highlights the influence of consumer behavior on socioeconomic disparities and the detrimental effects of the correlation between conspicuous consumption and inequality for society as a whole, despite being profitable for luxury brands.
Keywords: Conspicuous Consumption, Inequality, Google Trends, Status Goods
JEL Classification: D60, O40, O50
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