You’d think that creating a more equitable distribution of wealth would curb the urge to spend on status symbols – be they designer handbags or flat-screen TVs – as the “have-nots” try to keep up with the Jones.” But new marketing consumer research shows that the people will pay the price to stand out, even if they can’t afford it
Alfie is a London hair stylist. He is 25 years old, smart, and fond of expensive designer clothes. He puts himself into the low income bracket and admits his spending habits go way beyond his monthly salary. “I live in the moment, I spend rather than save and once I have splurged I wait for next month’s salary to do it all over again. I like to look good and stand out especially around my peers.”
But how relevant are these highly-controlled studies to the real world which is still reeling from America’s splurge and subprime mortgage fiasco? Chandon states, “One of the drivers of all this spending, the reckless spending, was the desire of people to improve their social status even though they may not have had the means.”
[This article is republished courtesy of INSEAD Knowledge, the portal to the latest business insights and views of The Business School of the World. Copyright INSEAD 2024]