10 Facts About Conspicuous consumption

In sociology and in economics, the term conspicuous consumption describes and explains the consumer practice of buying and using goods of a higher quality, price, or in greater quantity than practical.

In 1899, the sociologist Thorstein Veblen coined the term conspicuous consumption to explain the spending of money on and the acquiring of luxury commodities specifically as a public display of economic power — the income and the accumulated wealth of the buyer.

Development of Veblen's sociology of conspicuous consumption identified and described other economic behaviours such as invidious consumption, which is the ostentatious consumption of goods, an action meant to provoke the envy of other people; and conspicuous compassion, the ostentatious use of charity meant to enhance the reputation and social prestige of the donor; thus the socio-economic practises of consumerism derive from conspicuous consumption.

In 1949, James Duesenberry proposed the "demonstration effect" and the "bandwagon effect", whereby a person's conspicuous consumption psychologically depends upon the actual level of spending, but depends upon the degree of his or her spending, when compared with and to the spending of other people.

Veblen said that conspicuous consumption comprised socio-economic behaviours practised by rich people as activities usual and exclusive to people with much disposable income; yet a variation of Veblen's theory is presented in the conspicuous consumption behaviours that are very common to the middle class and to the working class, regardless of the person's race and ethnic group.

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Since the 19th century, conspicuous consumption explains the psychology behind the economics of a consumer society, and the increase in the types of goods and services that people consider necessary to and for their lives in a developed economy.

Each variant interpretation and complementary explanation is derived from Veblen's original sociologic proposition in The Theory of the Leisure Class: that conspicuous consumption is a psychological end in itself, from which the practitioner derived the honour of superior social status.

Conspicuous consumption becomes a self-generating cycle of spending money for the sake of social prestige.

Conspicuous consumption is exemplified by purchasing goods that are exclusively designed to serve as symbols of wealth, such as luxury-brand clothing, high-tech tools, and vehicles.

One hypothesized mechanism for this relationship is 'expenditure cascades' whereby Conspicuous consumption norms are set by the relatively wealthy, who then have more income and Conspicuous consumption relative to others as inequality rises.