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Empirical tests of status consumption : evidence from women's cosmetics

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Author Info
Chao, A.
Schor, J.B. (Tilburg University, Work and Organization Research Centre)
Abstract

Nearly all applied work in consumer demand assumes the absence of status consumption. The validity of this assumption has not been supported through empirical inquiry which confirms the unimportance of status motivations in consumer behavior. However, it is feasible to conduct tests which differentiate between status-motivated behavior and consumer purchasing in which no status motivations are present. This paper provides such a test, which is based on the fact that social visibility is ordinarily necessary for a good to serve as a status symbol. We investigate brand buying among four cosmetics products, and find, as hypothesized, that more "status" is purchased with the more socially visible products. Specifically, we find that visible goods have a lower price-quality correlation and a pattern of brand buying favoring higher-priced brands. We also investigate differing degrees of status-consumption by income, education, race, and urban/suburban dwelling. Our results provide strong support for the existence of status-consumption and are not consistent with theories in which no status-consumption is occurring.

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Paper provided by Tilburg University, Work and Organization Research Centre in its series WORC Paper with number 7.

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Date of creation: 1996
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Handle: RePEc:dgr:kubwor:19967

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  1. Alessie, Rob & Kapteyn, Arie, 1991. "Habit Formation, Interdependent References and Demographic Effects in the Almost Ideal Demand System," Economic Journal, Royal Economic Society, vol. 101(406), pages 404-19, May. [Downloadable!] (restricted)
  2. Bearden, William O & Netemeyer, Richard G & Teel, Jesse E, 1989. " Measurement of Consumer Susceptibility to Interpersonal Influence," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 15(4), pages 473-81, March.
  3. Abel, A.B., 1990. "Asset Prices Under Habit Formation And Catching Up With The Joneses," Weiss Center Working Papers 1-90, Wharton School - Weiss Center for International Financial Research.
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  4. Park, C Whan & Lessig, V Parker, 1977. " Students and Housewives: Differences in Susceptibility to Reference Group Influence," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 4(2), pages 102-10, Se.
  5. Kapteyn, Arie & Van Herwaarden, Floor G., 1980. "Interdependent welfare functions and optimal income distribution," Journal of Public Economics, Elsevier, vol. 14(3), pages 375-397, December. [Downloadable!] (restricted)
  6. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-16, March. [Downloadable!] (restricted)
  7. Deaton, A. & Grosh, M., 1998. "Consumption," Papers 191, Princeton, Woodrow Wilson School - Development Studies.
  8. David Neumark & Andrew Postlewaite, 1995. "Relative Income Concerns and the Rise in Married Women's Employment," NBER Working Papers 5044, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Congleton, Roger D., 1989. "Efficient status seeking: Externalities, and the evolution of status games," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 175-190, March. [Downloadable!] (restricted)
  10. Rauscher, Michael, 1993. "Demand for social status and the dynamics of consumer behavior," The Journal of Socio-Economics, Elsevier, vol. 22(2), pages 105-113. [Downloadable!] (restricted)
  11. James, Jeffrey, 1987. "Positional goods, conspicuous consumption and the international demonstration effect reconsidered," World Development, Elsevier, vol. 15(4), pages 449-462, April. [Downloadable!] (restricted)
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