Effects of Perceived Income Distribution, Equality, and Economy on Preferences For Conspicuous Consumption

Nailya Ordabayeva, Erasmus University Rotterdam, The Netherlands
Pierre Chandon, INSEAD, France
Daniel G. Goldstein, London Business School, UK
We study the effects of perceived and actual income distributions on preferences for conspicuous consumption. We find that conspicuous consumption is driven by rank in the local income distribution and beliefs about income equality. Counter to common belief, high perceived equality increases conspicuous consumption among the bottom half of local income earners. This ironic effect reverses when people expect an economic recession.
[ to cite ]:
Nailya Ordabayeva, Pierre Chandon, and Daniel G. Goldstein (2011) ,"Effects of Perceived Income Distribution, Equality, and Economy on Preferences For Conspicuous Consumption", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.