The idea of conspicuous consumption implies some amount of showing off. You buy stuff to demonstrate, in conspicuous fashion, just how well you’re doing. But a new study shows that buying high-status goods isn’t only about flashing some plumage. You might also be willing purchase pricey goods for entirely internal reasons—specifically, to help repair a bruised ego. Talk about “retail therapy!”
“Individuals conspicuously consume to signal their wealth.” That’s the opening line in a paper published in the Journal of Experimental Social Psychology written by Niro Sivanathan, an assistant professor at the London Business School, and Nathan C. Pettit, of Cornell University. But that’s just too simple and too straightforward an explanation for why people buy luxury, or “high-status” goods. For one thing, Sivanathan and Pettit hoped to explain why it is that poor people tend to spend a proportionally larger amount of their income on status purchases compared to folks who are well off. (Granted, low-income families a lot less money to begin with.) Through a series of studies, the researchers came to the conclusion that we consume not only to create some impressive exterior, but also to alleviate interior psychological pain—in other words, to make you feel better when you’re down in the dumps.
“The economic explanation – that people purchase conspicuous goods because they want to signal positive things about themselves to others – felt incomplete,” says Sivanathan. “We wanted to delve into what causes people to act out their urge to purchase conspicuous goods, and more importantly what causes that urge in the first place. Our research shows that part of the impetus behind these consumption decisions is the desire to repair self-threat.”
The studies were all conducted in labs, so we’re not talking about real-world scenarios, but they’re still interesting and revelatory, and the results will probably reinforce ideas that most of us know but could never quantify. Test subjects had their egos deflated in various ways—for example, by taking simple tests and seeing that they scored low compared to others—and then were asked how much they would be willing to pay for luxury goods such as watches and cars. And here’s the gist of the results:
Individuals whose self-worth was harmed sought affirmation in high-status goods.
The takeaway: Don’t go shopping when you’re depressed.
Below, Sivanathan and Pettit answer some of my questions about their study, the marketing of high-status goods, and conspicuous consumption in general.
The gist seems to be that when you’re experiencing low self-esteem, you’re more likely to feel a stronger desire to acquire high-status goods — luxury watches, fancy cars, and such. By extension, are there certain experiences in one’s life when you’re more likely to buy stuff? I’m thinking of moments when you’re ego takes a beating, like after a break-up with a significant other, or after you lose your job, or if your bank forecloses on your house. How are these kinds of experiences likely to affect one’s consumption of luxury/high-status items?
Our set of studies highlights that our desire to consume high-status goods, is not simply to signal status, prestige etc., but also a compensatory act to help soothe an ailing ego following psychological threats. Although we did not explore acute life events that might bring about these threats (i.e., losing a job, loss of a loved one, loss of ownership of a house etc.), your intuition would be consistent with our general assertion. Unfortunately, our data cannot speak to what types of negative life events trigger certain forms of status-consumption. However, to the extent that’s one’s ego is involved, we can be fairly confident from our work that such acute events should trigger compensatory consumption choices.
Are there any examples of marketing pitches that seemed pretty obviously aimed at lowering the consumer’s self-esteem (thereby increasing the chances that consumer will buy into the marketing pitch)?
There are no specific ads that come to mind, but your question speaks to the practice of certain organizations that engage in predatory marketing – targeting specific members who share a certain demographic (i.e., teenagers, low income) and advertise in a manner to these individuals that prey on their fears and concerns. This marketing ploy is often quite effective. Part of the reason could be that these ads remind individuals of their vulnerable state (psychological threat), which may then mobilize them to seek out the product that promises to help remedy the threat.
In addition, it is possible that ads which showcase beautiful people, or those who have achieved much success, extreme wealth, etc may also trigger compensatory status consumption. Not only do these ads make us feel that if we purchase the advertised product that we will, in some way, be more like the people in front of the camera, but they may also simultaneously make us feel bad about ourselves in comparison, which in turn drives desires for status goods. For instance, seeing a high-status person, someone we compare negatively against, may trigger a temporary ego threat — however if this individual is advertising a high-status product we are immediately drawn towards the possibility that purchasing the high-status product could ease our psychological pain. Although such behavior would be consistent with our theory, it is only our speculation at this juncture as we do not have data to support this claim.
Are there techniques/strategies for improving one’s self-esteem during times of weakness, or when confronted with the possibility of buying high-status electronics, watches, or other luxury goods? Is doing some sort of self-affirmation effective?
This is a great question. Unfortunately our research focused mostly on the causes of status consumption, without systematically exploring ways to prevent such behavior. Although we do use a self-affirmation exercise in our studies, this was done more as a test of the underlying mechanism (i.e., self-threat) and was not meant to be interpreted as a remedy for the behavior. Therefore, we’re rather hesitant to put anything in writing regarding solutions, without doing the appropriate research.
[Note: The research of consumer psychologist Kathleen Vohs actually recommends a Stuart Smalley-like self-affirmation as a means to self-control. In studies, participants asked to rank different values and personal characteristics of importance to them—you know, the important stuff in life—exhibited greater self-control than those who didn’t rank their priorities and values. Vohs writes:
Calling up one’s guiding principles in life temporarily improves performance at self-control under conditions that otherwise hasten self-control failure.]
When You Want to Feel No Pain, Grab Hold of Some Cash