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Experimental Economics

, Volume 21, Issue 4, pp 877–904 | Cite as

Status and the demand for visible goods: experimental evidence on conspicuous consumption

  • David Clingingsmith
  • Roman M. Sheremeta
Original Paper

Abstract

Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.

Keywords

Status Conspicuous consumption Experiment 

JEL Classification

D03 C91 

Notes

Acknowledgements

We thank Yan Chen, Ori Heffetz, David Huffman, John List, Tanya Rosenblat, Klaus Schmidt, Justin Sydnor, Lise Vesterlund, Alistair Wilson, Bart Wilson and seminar participants at Case Western Reserve University, Chapman University, Kent State University, the University of Michigan, the University of Pittsburgh as well as participants at the North American Economic Science Association Meetings in Dallas for helpful comments. We also thank the Weatherhead School of Management for generous funding of this project and Sarah Mattson for excellent research assistance. The usual disclaimers apply.

Supplementary material

10683_2017_9556_MOESM1_ESM.docx (50 kb)
Supplementary material 1 (DOCX 49 kb)

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Copyright information

© Economic Science Association 2017

Authors and Affiliations

  1. 1.Weatherhead School of ManagementCase Western Reserve UniversityClevelandUSA
  2. 2.Economic Science InstituteChapman UniversityOrangeUSA

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