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Conspicuous Consumption and Race: Evidence from South Africa

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  • Wolfhard Kaus

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Abstract

A century ago, Thorstein Veblen introduced socially contingent consumption into the economic literature. This paper complements the scarce empirical literature by testing his conjecture on South African household data and finds that Black and Coloured households spend relatively more on visible consumption than comparable White households. In an emerging economy context, this is especially important as it carries implications for spending on future assets. This paper explores whether the differences in visible expenditures can be explained with a signaling model of status seeking. Among Black households, spending on visible consumption is found to change predictably with different reference group incomes.

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Paper provided by Philipps University Marburg, Department of Geography in its series Papers on Economics and Evolution with number 2010-03.

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Date of creation: Mar 2010
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Handle: RePEc:esi:evopap:2010-03

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Keywords: Conspicuous consumption; Signaling; Status; South Africa Length 22 pages;

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Citations

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Cited by:
  1. Danzer, Alexander M. & Dietz, Barbara & Gatskova, Ksenia & Schmillen, Achim, 2013. "Showing Off to the New Neighbors? Income, Socioeconomic Status and Consumption Patterns of Internal Migrants," IZA Discussion Papers 7370, Institute for the Study of Labor (IZA).
  2. Leonhard Lades, 2013. "Explaining shapes of Engel curves: the impact of differential satiation dynamics on consumer behavior," Journal of Evolutionary Economics, Springer, Springer, vol. 23(5), pages 1023-1045, November.
  3. Andreas Chai & Wolfhard Kaus, 2013. "Signalling to whom? Conspicuous spending and the local density of the social group income distribution," Papers on Economics and Evolution, Philipps University Marburg, Department of Geography 2012-18, Philipps University Marburg, Department of Geography.
  4. Tim Friehe & Mario Mechtel, 2012. "Conspicuous Consumption and Communism: Evidence from East and West Germany," CESifo Working Paper Series, CESifo Group Munich 3922, CESifo Group Munich.
  5. Leonhard K. Lades, 2012. "The impact of differential satiation dynamics on changing consumer behavior, wellbeing, and innovative activity," Papers on Economics and Evolution, Philipps University Marburg, Department of Geography 2012-16, Philipps University Marburg, Department of Geography.

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