What is... | October 29, 2013

What is conspicuous consumption?

When you shop, how much of what you buy is driven by need? How much by an urge to show off to friends and co-workers? Spending money on extravagant items that display wealth or status is called “conspicuous consumption”.

It is unclear why exactly we do this – particularly as it can be damaging to wealth and happiness – but there is some evidence that biology might play a part.
If we want to be happier, wealthier and less wasteful, a first step may be to understand the underlying motivations for why conspicuous consumption is so attractive to some and what can be done about it.

A century of “look at me”
Back in 1899, Thorstein Veblen wrote about conspicuous consumption in his book The Theory of the Leisure Class. Since then, it has traditionally been assumed that our own conspicuous spending behaviour – such as buying designer clothes or expensive cars – is driven primarily by the social environment around us, by cultural norms which motivate us to "keep up with the Joneses".

The animal kingdom does it, too
However, recent research in evolutionary psychology and biology challenge these assumptions by arguing our innate biological desire to mate and reproduce influences spending behaviour. This evidence suggests there may be a “hard-wired” component to conspicuous consumption.
In the animal kingdom, for example, peacocks and other species engage in displays of resources which are crucial to their mating strategies. Similarly, humans buying flashy technology or fast cars may be signalling their sexual appeal through this consumption. Author Robert Frank writes in The Darwin Economy about a consumption “arms race”.

Putting it to the test
Academic research has been investigating this biological link to conspicuous consumption. A team led by Jill Sundie, at the University of Texas at San Antonio, ran an experiment in which participants imagined they had received an unexpected windfall of $2,000. They were asked how much of this money they would like to spend on purchases which might convey their newfound wealth, such as designer watches or treating ten friends to a night out on the town.
Those taking part in the study were split into those put into a ‘mating frame of mind’, by looking at dating profiles of eight attractive (and single) fellow students, and those not put into this frame of mind, who instead looked at photos of campus dormitory buildings.
The study found men in a romantic frame of mind chose to spend significantly more of their wealth on conspicuous purchases. Women’s spending, on the other hand, was unaffected.
Of course, it’s not clear whether the men were “hard wired” by nature to spend more or if they are responding to social pressures. But it’s an interesting finding nonetheless.

When showing off goes wrong
Spending a little on things you like might not be a problem – but only up to a point. This study from the United States suggests people are getting into debt in response to pressure to buy items to increase or maintain social standing. This Swiss happiness research examines envy of luxury cars and concludes conspicuous consumption can be bad for our overall happiness.

Shop and think
It remains difficult to say how much of our conspicuous consumption is driven by ancient evolutionary demands we aren't aware of, and how much by the social pressures of the modern age.
New research from evolutionary psychology helps us to put our behaviour in perspective and understand that it’s neither a moral failing nor inevitability. Knowing where our desires come from means we may be able to make the informed choice to alter what we do in the future.
One idea for the next time you go shopping for things you don’t need, is to think about what forces might be driving you. Weigh up what’s in your best interests.

ShoppingHappinessPeer effectsSocietyDebtCarsEnvironment

Joe Gladstone
Joe Gladstone

Behavioural economics researcher and consultant