Conspicuous Consumption

What is 'Conspicuous Consumption'

Conspicuous consumption is the purchase of goods or services for the specific purpose of displaying one's wealth. Conspicuous consumption is a means to show ones social status, especially when the goods and services publicly displayed are too expensive for other members of a person's class. This type of consumption is typically associated with the wealthy but can also apply to any economic class. The concept of consumerism stems from conspicuous consumption.

BREAKING DOWN 'Conspicuous Consumption'

The term was coined by American economist and sociologist Thorstein Veblen in his 1889 book, "The Theory of the Leisure Class." This type of consumption was considered to be a product of the developing middle class during the 19th and 20th centuries. This group had a greater percentage of disposable income to spend on goods and services that were generally not considered to be necessary.

RELATED TERMS
  1. Middle Class

    Individuals who fall between the working class and the upper ...
  2. Fiscal Multiplier

    The ratio in which the change in a nation's income level is affected ...
  3. Veblen Good

    Goods that are perceived to be exclusive as long as prices remain ...
  4. Upper Class

    A socioeconomic term used to describe individuals who reside ...
  5. Sliding Scale Fees

    A type of tax or cost that may change according to an associated ...
  6. Personal Consumption Expenditures ...

    A measure of price changes in consumer goods and services. Personal ...
Related Articles
  1. Personal Finance

    Veblen Good

    Named after economist Thorstein Veblen, who introduced the term "conspicuous consumption," a Veblen good is one whose demand increases as its price increases because consumers see it as an exclusive ...
  2. Economics

    Law Of Diminishing Marginal Utility

    Learn about this law of economics related to consumption.
  3. Mutual Funds & ETFs

    Which Fund Share Class is Best for Retirement?

    Mutual funds are a popular investment for retirement. Here's how to choose the best share class when investing in them.
  4. Investing Basics

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  5. Retirement

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn the measures and how to analyze them.
  6. Economics

    Macroeconomics: Supply, Demand and Elasticity

    By Stephen Simpson DemandDemand is driven by utility – the pleasure or satisfaction that a consumer obtains from consuming a good or service. Total utility is a function of the quantities ...
  7. Economics

    Explaining Marginal Propensity to Consume

    The marginal propensity to consume is a measure of how much consumption changes when income changes.
  8. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  9. Economics

    The Problem With Today’s Headline Economic Data

    Headwinds have kept the U.S. growth more moderate than in the past–including leverage levels and an aging population—and the latest GDP revisions prove it.
  10. Retirement

    Economic Indicators: Personal Income and Outlays

    By Ryan Barnes Release Date: 4-5 weeks after month's end Release Time: 8:30am Eastern Standard Time Coverage: Previous ...
RELATED FAQS
  1. What is the difference between induced consumption and autonomous consumption?

    Explore the difference between autonomous consumption and induced consumption. Simplify the world of economics by understanding ... Read Answer >>
  2. How does discretionary income relate to autonomous consumption?

    Learn what differentiates discretionary income from autonomous consumption, how the two relate to each other and what place ... Read Answer >>
  3. What can demographics tell us about present and future consumption trends and economic ...

    Learn what demographics reveals about present and future consumption trends and economic cycles. Demographics is the study ... Read Answer >>
  4. What's the difference between the income effect and the substitution effect?

    Learn more about the income effect and substitution effect in economics. Find out how these two principles impact consumer ... Read Answer >>
  5. What types of expenses are factored into autonomous consumption?

    Examine the principles of autonomous consumption in a zero-income scenario and the differences between induced or discretionary ... Read Answer >>
  6. What impact does disposable income have on the stock market?

    Learn what disposable income is and what it means for average consumers. Understand the impact that disposable income has ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center