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 status symbol. Unlike most goods, which have a downward-sloping demand curve because demand goes down as price goes up, a Veblen good has an upward-sloping demand curve.
Veblen goods are high quality, coveted items. They are designer, luxury items with a strong brand identity, and they are not sold in regular stores. These goods are priced so high that only the very affluent can afford them; the higher their price, the less likely other consumers can afford them, and the more buyers perceive them to signal great wealth and success. If a Veblen’s good price decreases, demand will decrease because status-conscious consumers will see it as less exclusive.