DEFINITION of 'Status Symbol'
A status symbol is an object which is meant to signify its owners' high social and economic standing. Although which things act as status symbols changes over time, they are always linked to the primary differences between the upper and lower classes within the society. In capitalist societies, status symbols are most often tied to monetary wealth.
BREAKING DOWN 'Status Symbol'
Expensive goods like luxury vehicles and large houses are mostly out of reach for lower economic classes, so these items serve as status symbols indicating that their owners are able to afford their extremely high prices. Since much of the utility derived from status symbols comes from their high price, an increased price for a status symbol may actually increase its demand, rather than diminish it. A product which exhibits this phenomenon is known as a Veblen good.