Next video:
Loading the player...

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.

  1. No results found.
Related Articles
  1. Insights

    What is Demand?

    Demand is the economic term for the cumulative wants and desires of consumers as they relate to a particular good or service. Generally speaking, if all other factors remain constant, as demand ...
  2. Personal Finance

    5 Overpaid Jobs

    Looking at whether someone else could do the same job for less pay, we find some surprising overpaid jobs.
  3. Insights

    What's Aggregate Demand?

    Aggregate demand is a macroeconomic term describing the total demand in an economy for all goods and services at any given price level in a given time period.
  4. Insights

    Calculating Income Elasticity of Demand

    Income elasticity of demand is a measure of how consumer demand changes when income changes.
  5. Insights

    What are Consumer Goods?

    Products that are purchased for consumption by the average consumer. Clothing, food, automobiles and jewelry are all examples of consumer goods
  6. Insights

    What Does Price Level Mean?

    Price level is the average of all current prices for goods and services in an economy.
  7. Insights

    What is Supply & Demand?

    The law of supply and demand is one of the most basic principles in economics. In simplest terms, the law of supply and demand states that when an item is scarce, but many people want it, the ...
  8. Insights

    What Is Equilibrium?

    Equilibrium is a state of balanced supply and demand.
  9. Investing

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  6. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
Trading Center