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I hope one day people are free from the grip of Veblen goods. Its probably impossible due to genetic causes, like a demand for status. However we may be able t

I hope one day people are free from the grip of Veblen goods. Its probably impossible due to genetic causes, like a demand for status. However we may be able to educate people that 'you cannot buy class'. Its interesting how many lower income people have iphones, Jordans, Teslas/Mustangs/Corvettes but as soon as you hit the upper-middle class, these disappear in favor of the more practical/functional items of similar prices. Not to say that some in the upper-middle class don't waste money on a Ferrari/Lambo, but I imagine its the same thing, 0.1ers don't buy those products.

JohnFen 3y ago
There's some fascinating class-based spending behavior I was taught in school decades ago. I have no idea how valid it still is, but I presume nothing much has changed. What I remember finding the most curious on first glance is that people in the lower-upper income group are the most likely to be bankrupt within five years of hitting that income band. Bu the explanation made sense to me: at that income level, you begin to compare your lifestyle to those who are much wealthier than you are, so you feel poor by comparison. Therefore you're more likely to start spending at rates that the income level can't actually sustain, in an attempt to live like the wealthier people you have begun to compare yourself to.
- paganel 3y ago
  I think what you're describing is very similar to the Diderot effect [1], which has been discussed in here several times (I'm too lazy to search for those threads, but that's how myself have learned about it): > The Diderot Effect is a phenomenon that occurs when acquiring a new possession leads to a spiral of consumption that results in the acquisition of even more possessions. In other words, it means that buying something new can cause a chain reaction of buying more and more things because the new item makes one feel like one needs other things to go with it or to keep up with it. This can lead to overspending and accumulating more possessions than one actually needs or uses. [1] https://en.wikipedia.org/wiki/Diderot_effect https://en.wikipedia.org/wiki/Diderot_effect
  - geodel 3y ago
    This is very true in my case. And I have justified this in multiple forms. First, I really need it, then its been proven over years I didn't use much. Later I purchased more stuff, reasoning being This is my last hurrah, buy it even if I don't need it, in few years I will have no desire left to buy anyway. This didn't have disastrous effect as most purchases were smaller kitchen tools (<100 dollars) and most expensive was computer ( < 2500 dollars). After that I've been little more conscious.
Cockbrand 3y ago
In case you're not quoting from it anyway, I'd recommend the book "Class" by Paul Fussell. It's a bit outdated, and often not really serious, but it takes this kind of observation quite far.
- bamfly 3y ago
  I've found it remarkably useful, despite often being a bit tongue-in-cheek. The insight on mirrored surfaces was especially interesting. I remember seeing a staged photo of some Trump kid & spouse with their own kid playing in a living room with a spotless mirrored table and was like "oh, hey!" Lots of fun bits like that. ... Actually, the entire Trump thing was fascinating with Fussell's instruction guiding one's experience of it. "Prole" fit on expensive suits. Middle-as-fuck taste in home decor ("if you're rich it means everything's huge and covered in gold, right?"). Still haven't figured out how much of it's genuine and how much of it's an affectation for marketing/personal-branding reasons. He got his hope-for-the-future "Class X" all wrong—just an upper-middle youth fashion wave, mostly—but otherwise it's still a surprisingly-useful tool for analysis, considering how old and half-jokey it was.
  - 0cf8612b2e1e 3y ago
    What was the insight about mirrored surfaces? Makes place appear bigger? More annoying to keep clean? Ensure shiny things are frequently visible?
    - bamfly 3y ago
      > More annoying to keep clean? Looks shitty if it's even slightly dirty, gets dirty if you so much as look at it, requires very thorough cleaning to make it look good (no smudges or streaks). Means you don't do your own cleaning—like, at all. Once-a-week housekeepers can't keep a mirrored coffee table looking tidy. Probably also helps if you have whole rooms you barely use, but even dust'll have it looking shabby faster than, say, wood. If you buy such a piece and do your own cleaning—and especially if you actually use it—you'll probably regret it in a matter of days. It's the kind of thing someone without that can only own (without it looking way worse than almost any alternative material) if they're so dedicated to it that it'll be the thing people remember about them. "Aunt Gertrude and that damn table. You remember that? Wouldn't let anyone touch it, and damned if every time you came to visit, she wasn't cleaning it. She had a whole process. Drawer of different towels, three or four cleaning bottles she had to put on in order. One time my kid touched it with a cookie-greased hand and she saw me getting the Windex, nearly bit my head off."
ypzhang2 3y ago
I doubt there is truth to the common trope that "REAL rich people don't buy X/Y/Z". Its a No True Scotsman argument. In actuality, Kelly / Birkin are appreciated by a wide spectrum of people, even folks who are "0.1%ers". Just like "0.1%ers" buy luxury cars. Hell, Bill Gates (a "0.1%er" squarely) basically lobbied for a law just so he can import a Porsche 959. Jerry Seinfeld has a huge car collection. If you want to argue "old money", Prince Harry has a Jaguar E-type and a F-Type. Luxury goods are enjoyed by the leisure class, period, because they have disposable income and like nice things.
- deleted 3y ago
  [deleted]
- psd1 3y ago
  Right, these cars are distinctive and conspicuous, but they don't have "Porsche" in repeating motifs all over the bodywork. It's the humungous branding that makes the LV and Gucci goods tacky.
deleted 3y ago
[deleted]
qzw 3y ago
I don't disagree with your overall point, but some of your examples are hardly Veblen anymore. Or perhaps we have very different definitions of upper-middle class. I live in what I consider an upper-middle class area, where median household income is about 3-5x the state's as a whole. Everybody has an iPhone and you can't throw a rock without hitting a Tesla/Mustang/Corvette. Jordans I won't comment on since I know nothing about sneakers, but I would argue the other brands are all no longer Veblen. My MIL used to buy only mid-range Samsung phones that would become slow or lose significant battery within a couple of years, necessitating a replacement. My wife finally talked her into getting an iPhone, and she's been using the same one for 4+ years and has no desire to replace it, because it's still working fine. And similarly for all the other people in my family and their iPhones. I personally still rock a Xs. So for us and millions of other people, iPhones are actually a better value than most alternatives. Similarly, the Mustang and Corvette are usually considered to be excellent values within their class. Sure they're toys, but they deliver a lot more performance per dollar than most fancier sporty cars. Tesla has been and arguably still is the best electric car brand. Add in the recent price reductions and the reintroduction of tax credits, some Tesla models now have final costs below the average new car price. Hardly a status indicator when you buy a car that costs less than many Hondas and Toyotas.
- mucle6 3y ago
  If almost everyone has an iPhone/Telsa, but a few people don't, some people may begin to read it as a signal. In a sense, when veblen goods are popular in a community, they have become table stakes instead of status symbols. They're still veblen goods though even if they're table stakes. Because they became table stakes due to their price.
- ghaff 3y ago
  I think we're getting away from the definition of Veblen goods in that it implies people wouldn't want a Tesla, Mustang, or iPhone as much if you cut the price in half. And that seems manifestly silly. On the other hand, I can absolutely imagine that a lot of the people who buy supercars would be less likely to buy a Lambo, given it's downsides, if it were something any upper middle-class household could afford if they wanted to.
mercutio2 3y ago
You think iPhones are out of reach to poor Americans? Or that richer Americans don’t predominantly use iPhones? I think I agree with your point about who’s consuming positional goods, but… iPhones are a weird entry in your list of luxury goods.
steveklabnik 3y ago
> Not to say that some in the upper-middle class don't waste money on a Ferrari It is not actually possible to directly buy the fancy Ferraris. No matter how much money you have. It's a whole thing. You don't call them, they call you.
- westoque 3y ago
  same with high end luxury watches. i think that these companies just add another layer on top of the standard veblen goods definition making it even more exclusive/desirable, and therefore even harder to get one.
adamsmith143 3y ago
>Its interesting how many lower income people have iphones, Jordans, Teslas/Mustangs/Corvettes Yeah all those food stampers buying Corvettes and Teslas is so annoying. Lolwut
gamblor956 3y ago
Upper-middle class people can't afford Ferraris or Lamborghinis. If you can afford either of those cars, which start in the six-figures, you are not middle class, you are very definitely upper class. You can't even get on the list to buy one of these cars without a bank account balance in the 7 figures. Also...every major wireless company offers iPhones free or heavily discounted. iPhones aren't the luxury goods anymore, they're the cheap alternative.
- skibble 3y ago
  Your comment about iPhone build quality is as anecdotal as they come. Here's my counterpoint anecdotal take: I've had pretty much every iPhone model since the iPhone 3G, and the tiny number of issues I've had have been straightforward (a free screen replacement as a result of a publicly acknowledged issue, for example). I also work in the repair sector (not for Apple), and have seen absolutely no evidence to support your claim that iPhones are dying left and right. When Apple do entire device replacements, this is simply because for weird issues it's a quicker and easier on-the-spot resolution for both the end user and the Genius Bar than spending days depriving the owners of pretty vital devices trying to reproduce odd issues. Articles abound detailing how exacting Apple are with suppliers, e.g: https://www.theverge.com/23743095/apple-watch-band-release-x206-assembly-button-of-the-month https://www.theverge.com/23743095/apple-watch-band-release-x...
- seabass-labrax 3y ago
  From vodafone.co.uk: Samsung Galaxy A14 5G - £15 per month + £9 upfront £563 in total (3yrs no inflation) Apple iPhone 11 - £32 per month + £19 upfront £1191 in total (3yrs no inflation) The iPhone 11 is being sold for £480 on Amazon - I'm struggling to see where the heavy discount is.
  - bluedino 3y ago
    In the USA, pre-paid providers offer the iPhone 11 for $49 https://www.boostmobile.com/stores/offers?intcid:HP:BF:Banner:iphone11instore https://www.boostmobile.com/stores/offers?intcid:HP:BF:Banne...
ke88y 3y ago
> iphones As an ex-Android user who held out as long as I could: these aren't a Veblen good. 1. iphones aren't meaningfully more expensive than android alternatives, except at the very bottom of the market, and even then the difference isn't huge, even for lower income earners, when you finance. 2. There are actual product differentiators between Apple and Android. There are very real issues like privacy and app availability/quality; even when an Android version of an app exists, it's not always as functional. 3. But far more importantly, the newest range of Pixel phones are absolute garbage and barely work. After two top of the line androids in less than a year, I got sick of missing text messages and dropping phone calls because of shitty software. I was forced to switch to a (cheaper!) iphone. > ...as soon as you hit the upper-middle class, these disappear in favor of the more practical/functional items of similar prices. iphones are also an exception to this rule.
pfisherman 3y ago
Jordans are not Veblen goods. They are entry level sneakers. Enough to set you apart from the sketchers wearing squares, but they are not margielas or visvims.

JohnFen 3y ago

There's some fascinating class-based spending behavior I was taught in school decades ago. I have no idea how valid it still is, but I presume nothing much has changed. What I remember finding the most curious on first glance is that people in the lower-upper income group are the most likely to be bankrupt within five years of hitting that income band. Bu the explanation made sense to me: at that income level, you begin to compare your lifestyle to those who are much wealthier than you are, so you feel poor by comparison. Therefore you're more likely to start spending at rates that the income level can't actually sustain, in an attempt to live like the wealthier people you have begun to compare yourself to.

paganel 3y ago
I think what you're describing is very similar to the Diderot effect [1], which has been discussed in here several times (I'm too lazy to search for those threads, but that's how myself have learned about it): > The Diderot Effect is a phenomenon that occurs when acquiring a new possession leads to a spiral of consumption that results in the acquisition of even more possessions. In other words, it means that buying something new can cause a chain reaction of buying more and more things because the new item makes one feel like one needs other things to go with it or to keep up with it. This can lead to overspending and accumulating more possessions than one actually needs or uses. [1] https://en.wikipedia.org/wiki/Diderot_effect https://en.wikipedia.org/wiki/Diderot_effect
- geodel 3y ago
  This is very true in my case. And I have justified this in multiple forms. First, I really need it, then its been proven over years I didn't use much. Later I purchased more stuff, reasoning being This is my last hurrah, buy it even if I don't need it, in few years I will have no desire left to buy anyway. This didn't have disastrous effect as most purchases were smaller kitchen tools (<100 dollars) and most expensive was computer ( < 2500 dollars). After that I've been little more conscious.

Cockbrand 3y ago

In case you're not quoting from it anyway, I'd recommend the book "Class" by Paul Fussell. It's a bit outdated, and often not really serious, but it takes this kind of observation quite far.

bamfly 3y ago
I've found it remarkably useful, despite often being a bit tongue-in-cheek. The insight on mirrored surfaces was especially interesting. I remember seeing a staged photo of some Trump kid & spouse with their own kid playing in a living room with a spotless mirrored table and was like "oh, hey!" Lots of fun bits like that. ... Actually, the entire Trump thing was fascinating with Fussell's instruction guiding one's experience of it. "Prole" fit on expensive suits. Middle-as-fuck taste in home decor ("if you're rich it means everything's huge and covered in gold, right?"). Still haven't figured out how much of it's genuine and how much of it's an affectation for marketing/personal-branding reasons. He got his hope-for-the-future "Class X" all wrong—just an upper-middle youth fashion wave, mostly—but otherwise it's still a surprisingly-useful tool for analysis, considering how old and half-jokey it was.
- 0cf8612b2e1e 3y ago
  What was the insight about mirrored surfaces? Makes place appear bigger? More annoying to keep clean? Ensure shiny things are frequently visible?
  - bamfly 3y ago
    > More annoying to keep clean? Looks shitty if it's even slightly dirty, gets dirty if you so much as look at it, requires very thorough cleaning to make it look good (no smudges or streaks). Means you don't do your own cleaning—like, at all. Once-a-week housekeepers can't keep a mirrored coffee table looking tidy. Probably also helps if you have whole rooms you barely use, but even dust'll have it looking shabby faster than, say, wood. If you buy such a piece and do your own cleaning—and especially if you actually use it—you'll probably regret it in a matter of days. It's the kind of thing someone without that can only own (without it looking way worse than almost any alternative material) if they're so dedicated to it that it'll be the thing people remember about them. "Aunt Gertrude and that damn table. You remember that? Wouldn't let anyone touch it, and damned if every time you came to visit, she wasn't cleaning it. She had a whole process. Drawer of different towels, three or four cleaning bottles she had to put on in order. One time my kid touched it with a cookie-greased hand and she saw me getting the Windex, nearly bit my head off."

ypzhang2 3y ago

I doubt there is truth to the common trope that "REAL rich people don't buy X/Y/Z". Its a No True Scotsman argument. In actuality, Kelly / Birkin are appreciated by a wide spectrum of people, even folks who are "0.1%ers". Just like "0.1%ers" buy luxury cars. Hell, Bill Gates (a "0.1%er" squarely) basically lobbied for a law just so he can import a Porsche 959. Jerry Seinfeld has a huge car collection. If you want to argue "old money", Prince Harry has a Jaguar E-type and a F-Type. Luxury goods are enjoyed by the leisure class, period, because they have disposable income and like nice things.

deleted 3y ago
[deleted]
psd1 3y ago
Right, these cars are distinctive and conspicuous, but they don't have "Porsche" in repeating motifs all over the bodywork. It's the humungous branding that makes the LV and Gucci goods tacky.

deleted 3y ago

[deleted]

qzw 3y ago

I don't disagree with your overall point, but some of your examples are hardly Veblen anymore. Or perhaps we have very different definitions of upper-middle class. I live in what I consider an upper-middle class area, where median household income is about 3-5x the state's as a whole. Everybody has an iPhone and you can't throw a rock without hitting a Tesla/Mustang/Corvette. Jordans I won't comment on since I know nothing about sneakers, but I would argue the other brands are all no longer Veblen. My MIL used to buy only mid-range Samsung phones that would become slow or lose significant battery within a couple of years, necessitating a replacement. My wife finally talked her into getting an iPhone, and she's been using the same one for 4+ years and has no desire to replace it, because it's still working fine. And similarly for all the other people in my family and their iPhones. I personally still rock a Xs. So for us and millions of other people, iPhones are actually a better value than most alternatives. Similarly, the Mustang and Corvette are usually considered to be excellent values within their class. Sure they're toys, but they deliver a lot more performance per dollar than most fancier sporty cars. Tesla has been and arguably still is the best electric car brand. Add in the recent price reductions and the reintroduction of tax credits, some Tesla models now have final costs below the average new car price. Hardly a status indicator when you buy a car that costs less than many Hondas and Toyotas.

mucle6 3y ago
If almost everyone has an iPhone/Telsa, but a few people don't, some people may begin to read it as a signal. In a sense, when veblen goods are popular in a community, they have become table stakes instead of status symbols. They're still veblen goods though even if they're table stakes. Because they became table stakes due to their price.
ghaff 3y ago
I think we're getting away from the definition of Veblen goods in that it implies people wouldn't want a Tesla, Mustang, or iPhone as much if you cut the price in half. And that seems manifestly silly. On the other hand, I can absolutely imagine that a lot of the people who buy supercars would be less likely to buy a Lambo, given it's downsides, if it were something any upper middle-class household could afford if they wanted to.

mercutio2 3y ago

You think iPhones are out of reach to poor Americans? Or that richer Americans don’t predominantly use iPhones? I think I agree with your point about who’s consuming positional goods, but… iPhones are a weird entry in your list of luxury goods.

steveklabnik 3y ago

> Not to say that some in the upper-middle class don't waste money on a Ferrari It is not actually possible to directly buy the fancy Ferraris. No matter how much money you have. It's a whole thing. You don't call them, they call you.

westoque 3y ago
same with high end luxury watches. i think that these companies just add another layer on top of the standard veblen goods definition making it even more exclusive/desirable, and therefore even harder to get one.

adamsmith143 3y ago

>Its interesting how many lower income people have iphones, Jordans, Teslas/Mustangs/Corvettes Yeah all those food stampers buying Corvettes and Teslas is so annoying. Lolwut

gamblor956 3y ago

Upper-middle class people can't afford Ferraris or Lamborghinis. If you can afford either of those cars, which start in the six-figures, you are not middle class, you are very definitely upper class. You can't even get on the list to buy one of these cars without a bank account balance in the 7 figures. Also...every major wireless company offers iPhones free or heavily discounted. iPhones aren't the luxury goods anymore, they're the cheap alternative.

skibble 3y ago
Your comment about iPhone build quality is as anecdotal as they come. Here's my counterpoint anecdotal take: I've had pretty much every iPhone model since the iPhone 3G, and the tiny number of issues I've had have been straightforward (a free screen replacement as a result of a publicly acknowledged issue, for example). I also work in the repair sector (not for Apple), and have seen absolutely no evidence to support your claim that iPhones are dying left and right. When Apple do entire device replacements, this is simply because for weird issues it's a quicker and easier on-the-spot resolution for both the end user and the Genius Bar than spending days depriving the owners of pretty vital devices trying to reproduce odd issues. Articles abound detailing how exacting Apple are with suppliers, e.g: https://www.theverge.com/23743095/apple-watch-band-release-x206-assembly-button-of-the-month https://www.theverge.com/23743095/apple-watch-band-release-x...
seabass-labrax 3y ago
From vodafone.co.uk: Samsung Galaxy A14 5G - £15 per month + £9 upfront £563 in total (3yrs no inflation) Apple iPhone 11 - £32 per month + £19 upfront £1191 in total (3yrs no inflation) The iPhone 11 is being sold for £480 on Amazon - I'm struggling to see where the heavy discount is.
- bluedino 3y ago
  In the USA, pre-paid providers offer the iPhone 11 for $49 https://www.boostmobile.com/stores/offers?intcid:HP:BF:Banner:iphone11instore https://www.boostmobile.com/stores/offers?intcid:HP:BF:Banne...

ke88y 3y ago

> iphones As an ex-Android user who held out as long as I could: these aren't a Veblen good. 1. iphones aren't meaningfully more expensive than android alternatives, except at the very bottom of the market, and even then the difference isn't huge, even for lower income earners, when you finance. 2. There are actual product differentiators between Apple and Android. There are very real issues like privacy and app availability/quality; even when an Android version of an app exists, it's not always as functional. 3. But far more importantly, the newest range of Pixel phones are absolute garbage and barely work. After two top of the line androids in less than a year, I got sick of missing text messages and dropping phone calls because of shitty software. I was forced to switch to a (cheaper!) iphone. > ...as soon as you hit the upper-middle class, these disappear in favor of the more practical/functional items of similar prices. iphones are also an exception to this rule.

pfisherman 3y ago

Jordans are not Veblen goods. They are entry level sneakers. Enough to set you apart from the sketchers wearing squares, but they are not margielas or visvims.