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.Phillips, Ronnie J. 2014 April 22. "Conspicuous consumption." Encyclopedia Britannica. In 1899, the sociologist Thorstein Veblen coined the term conspicuous consumption to explain the spending of money on and the acquiring of luxury commodities (goods and services) specifically as a public display of economic power—the income and the accumulated wealth—of the buyer. To the conspicuous consumer, the public display of discretionary income is an economic means of either attaining or maintaining a given social status.The New Fontana Dictionary of Modern Thought, Third Edition, Alan Bullock, Stephen Trombley, Eds., 1993, p. 162.
The development of Veblen's sociology of conspicuous consumption also 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 practices of consumerism derive from conspicuous consumption.
History and development In The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), Thorstein Veblen identified, described, and explained the behavioural characteristics of the nouveau riche (new rich) social class that emerged from capital accumulation during the Second Industrial Revolution (1860–1914).Veblen, Thorstein. (1899) The Theory of the Leisure Class|Theory of the Leisure Class: An Economic Study in the Evolution of Institutions. New York: Macmillan. (, 1994 Dover pbk ed.; , 1994 Penguin Classics ed.). In that 19th-century social and historical context, the term "conspicuous consumption" applied narrowly in association with the men, women, and families of the upper class who applied their great wealth as a means of publicly manifesting their social power and prestige, either real or perceived. The strength of one's reputation is in direct relationship to the amount of money possessed and displayed; that is to say, the basis "of gaining and retaining a good name, are leisure and conspicuous consumption."Veblen, Thorstein (1912), The Theory of the Leisure Class. New York: Macmillan Company. p. 4.
In the 1920s, economists such as Paul Nystrom proposed that changes in lifestyle as result of the industrial age led to massive expansion of the "pecuniary emulation." That conspicuous consumption had induced in the mass of society a "philosophy of futility" that would increase the consumption of goods and services as a social fashion; consumption for the sake of 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 also depends upon the degree of his or her spending, when compared with and to the spending of other people. That the conspicuous consumer is motivated by the importance, to him or to her, of the opinion of the social and economic reference groups for whom he or she are performed the conspicuous consumption.
Social class and consumption 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. Such upper-class economic behaviour is especially common in societies with emerging economies in which the conspicuous consumption of goods and services ostentatiously signals that the buyer rose from poverty and has something to prove to society.
In The Millionaire Next Door: The Surprising Secrets of America's Wealthy (1996), Thomas J. Stanley and William D. Danko reported conspicuous frugality, another variation of Veblen's social-class relation to conspicuous consumption. That Americans with a net worth of more than a million dollars usually avoid conspicuous consumption, and tend to practise frugality, such as paying cash for a used car rather using credit, in order to avoid material depreciation and paying interest upon a car loan.
Consumerism theory 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. Supporting interpretations and explanations of contemporary conspicuous consumption are presented in Consumer Culture (1996) by Celia Lury, Consumer Culture and Modernity (1997) by Don Slater,Slater, Don. (1997) Consumer Culture and Modernity. London: Polity. Symbolic Exchange and Death (1998) by Jean Baudrillard,Baudrillard, J. (1998b) Symbolic Exchange and Death. London: Sage. and Spent: Sex, Evolution, and the Secrets of Consumerism (2009) by Geoffrey Miller.Miller G, Spent: sex, evolution and the secrets of consumerism, Random House, London, 2009 ()
Moreover, D. Hebdige, in Hiding in the Light (1994), proposes that conspicuous consumption is a form of displaying a personal identity,Hebdige, D. (1994) Hiding in the Light. London: Routledge.Wilson, E. (ed.) Chic Thrills. A Fashion Reader. London: HarperCollins and a consequent function of advertising, as proposed in Ads, Fads, and Consumer Culture (2000), by A. A. Berger.Berger, A. A. (2000) Ads, Fads, and Consumer Culture. Lanham: Rowman and Littlefield. 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 (man, woman, family) derived the honour of superior social status.
Materialism and gender In An Examination of Materialism, Conspicuous Consumption and Gender Differences (2013), the researchers Brenda Segal and Jeffrey S. Podoshen reported great differences in the consumerism practised by men and women. The data about materialism and impulse purchases of 1,180 Americans indicate that men have greater scores for materialism and conspicuous consumption; and that women tended to buy goods and services on impulse; and both sexes were equally loyal to a given brand of goods and services.
Distinctions of type The term conspicuous consumption denotes the act of buying something, especially something expensive, that is not necessary to one's life, in a noticeable way.Longman American Dictionary, 2000, p. 296. Scholar Andrew Trigg (2001) defined conspicuous consumption as behaviour by which one can display great wealth, by means of idleness—expending much time in the practice of leisure activities, and spending much money to consume luxury goods and services.
Conspicuous compassion, the practice of publicly donating large sums of money to charity to enhance the social prestige of the donor, is sometimes described as a type of conspicuous consumption. This behaviour has long been recognised and sometimes attacked—for example, the New Testament story Lesson of the widow's mite criticises wealthy people who make large donations ostentatiously, while praising poorer people who make small but comparatively more difficult donations in private.
Possible motivations for conspicuous consumption include: Demonstration/bandwagon effect — In the book Income, Saving and the Theory of Consumer Behavior (1949), James Duesenberry proposed that a person's conspicuous consumption psychologically depends not only upon the actual level of spending, but also upon the degree of his or her spending, as compared with the spending of other people. Thus the conspicuous consumer is motivated by the importance, to him or to her, of the opinion of the social and economic reference groups for whom are performed the patterns of conspicuous consumption.Duesenberry, James S. (1949), Income, Saving and the Theory of Consumer Behavior. Cambridge, MA: Harvard University Press. Aggressive ostentation — In a 2006 CBSNews.com article, Dick Meyer said that conspicuous consumption is a form of anger towards society, an "aggressive ostentation" that is an antisocial behaviour, which arose from the social alienation suffered by men, women, and families who feel they have become anonymous in and to their societies. This feeling of alienation is aggravated by the decay of the communitarian ethic essential to a person feeling him or herself part of the whole society. Shelter and transport — In the United States, the trend towards building houses that were larger than needed by a nuclear family began in the 1950s. Decades later, in the year 2000, that practice of conspicuous consumption resulted in people buying houses that were double the average size needed to comfortably house a nuclear family. Negative consequences of either buying or building an oversized house might include: the loss of or reduction in the family's domestic recreational space—the backyard and the front yard; the spending of old-age retirement funds to pay for a too-big house; over-long commuting time, from house to job, and vice versa, because the required plot of land was unavailable near a city.
Oversized houses facilitated other forms of conspicuous consumption, such as an oversized garage for the family's oversized motor vehicles or buying more clothing to fill larger clothes closets. Conspicuous consumption becomes a self-generating cycle of spending money for the sake of social prestige. Analogous to the consumer trend for oversized houses is the trend towards buying oversized light trucks, specifically the off-road sport utility vehicle type (cf. station wagon/estate car), as a form of psychologically comforting conspicuous consumption, because such large vehicles usually are bought by city-dwellers, an urban nuclear family.
Prestige – In a 1999 article, Jacqueline Eastman, Ronald Goldsmith, and Leisa Reinecke Flynn said that status consumption is based upon conspicuous consumption; however, the literature of contemporary marketing does not establish definitive meanings for the terms status consumption and conspicuous consumption. Moreover, A. O'Cass and H. Frost (2002) claim that sociologists often incorrectly used the two terms as interchangeable and equivalent terms. In a later study, O'Cass and Frost determined that, as sociological constructs, the terms status consumption and conspicuous consumption denote different sociological behaviours. About the ambiguities of denotation and connotation of the term conspicuous consumption, R. Mason (1984) reported that the classical, general theories of consumer decision-processes do not readily accommodate the construct of "conspicuous consumption", because the nature of said socio-economic behaviours varies according to the social class and the economic group studied.