Three Quirky Consumer Phrases: ‘Android’s Law,’ ‘Conscious Spending,’ ‘Veblen Good’

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What do these phrases mean? If you don’t know, there’s a decent chance you’re spending money foolishly.
Android’s Law
A CNNMoney post explains that the popularity of Android, Google’s free open-source operating system for cell phones, has rapidly increased the pace at which manufacturers can build and begin selling new smartphones. This is how, as the NYT’s David Pogue put it, a new Android phone seems “to come out every Friday afternoon.” It is also how a smartphone can seem old and outdated a mere six months after purchase. The CNNMoney article explains further:

We’re calling this new trend “Android’s law.” It’s similar to Moore’s law, the 1965 paper by Intel (INTC, Fortune 500) co-founder Gordon Moore, which observed a trend that has held true for more than five decades: Microchip manufacturers can double the number of components on a piece of silicon every two years…

Analysts agree that the market cycle at some point will stop shortening because customers can’t absorb new products so fast. But one lasting change is clear: It’s not going back to the way it was.

If you’re one of those customers regularly “absorbing new products,” you can take pride that you’re at the forefront of technology—but you’re paying a premium compared to folks who don’t feel the need to upgrade every few months.

Conscious Spending
Get Rich Slowly’s J.D. Roth cancelled basic cable to save $15 a month. He didn’t make the move because of a dire financial situation—at the same time he was canceling cable, he was planning an epic trip to Europe and Africa. So why did he cancel? He simply took a step back, evaluated the service and how much he wanted it, and consciously decided it was not worth the money. He’d much rather use that money for other purposes. J.D. explains further:

Conscious spending implies that you’re actively choosing to spend on some things and not on others.

Contrast this with how most people spend. (And, in truth, how even financially-savvy folks spend a lot of their money.) We tend to spend on reflex. We buy things because we’re expected to, because everyone else does.

It’s easier to turn off your brain and follow the crowd. But to truly get the most bang for your buck, you must prioritize, think things over, and make decisions as to when to save and when to spend. The goal is to achieve, in the oft-quoted words from Carl in Caddy Shack, “total consciousness.” Which is nice.

Veblen Good
Rationally speaking, consumers are willing to pay more money for goods that are more desirable. But consumers aren’t necessarily rational beings. Sometimes, goods are considered more desirable simply because they’re more expensive. A WSJ story on “Fake Authenticity” reflects on the real reasons why consumers are willing to pay $148 for Levi’s jeans sold at Brooks Brothers stores when similar jeans are available for under $100 bought directly from Levi’s:

I suspect the real reason for the inflated price is to create the impression that the jeans are somehow superior. This is the quirky luxury phenomenon that economists call a “Veblen good”—a product that is valued and desirable simply for being more expensive.

The phrase comes from Thorstein Veblen, an American economist who, by no small coincidence, is also credited for coining the phrase “conspicuous consumption.”

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