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. Thorstein Veblen

    Investopedia explains: An economist and sociologist who lived ...
  2. Positional Goods

    Goods which act as a status symbols, signaling their owners' ...
  3. Consumption Function

    The consumption function is a mathematical formula laid out by ...
  4. Collaborative Consumption

    The shared use of a good or service by a group.
  5. Middle Class

    Individuals who fall between the working class and the upper ...
  6. Autonomous Consumption

    The minimum level of consumption that would still exist even ...
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. Investing

    Which Income Class Are You?

    This article identifies the various income classes in America. Find out which class you fall under.
  3. ETFs & Mutual Funds

    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. Markets

    Explaining Personal Consumption Expenditures

    Personal consumption expenditures, or PCE, is a measure of price changes in consumer goods and services.
  5. Investing

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  6. 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.
  7. Personal Finance

    U.S. Consumer Spending Weak Despite Low Gas Prices (M)

    Find out why American consumers are spending less and saving more, and why that might actually be a good thing for the whole U.S. economy.
  8. Markets

    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 ...
  9. Markets

    What's the Economy?

    The economy is the production and consumption activities that determine how scarce resources are allocated in an area.
  10. Markets

    Explaining Marginal Propensity to Consume

    The marginal propensity to consume is a measure of how much consumption changes when income changes.
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. Are Social Security payments included in the US GDP calculation?

    Understand how gross domestic product is calculated and whether or not transfer payments such as Social Security are included ... Read Answer >>
  6. 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 >>
Trading Center