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Expenditure Visibility and Consumer Behavior: New Evidence

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  • Ori Heffetz

Abstract

Expenditure visibility—the extent to which a household’s spending on a consumption category is noticeable to others—is measured in three new surveys, with ~3,000 telephone and online respondents. Visibility shows little change across time (ten years) and survey methods. Four different notions, or dimensions, of visibility are measured: the noticeability of above-average spending on a category; that of below-average spending; and the positivity/negativity of impressions made by above- and below-average spending. Jointly, these visibility measures explain up to three quarters or more of the observed variation in total-expenditure elasticities across consumption categories in U.S. data. Possible theoretical explanations are explored.

Suggested Citation

  • Ori Heffetz, 2018. "Expenditure Visibility and Consumer Behavior: New Evidence," NBER Working Papers 25161, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25161
    Note: AG PE
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    References listed on IDEAS

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    1. Wagner A. Kamakura & Rex Yuxing Du, 2012. "How Economic Contractions and Expansions Affect Expenditure Patterns," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(2), pages 229-247.
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    5. Ori Heffetz, 2011. "A Test of Conspicuous Consumption: Visibility and Income Elasticities," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1101-1117, November.
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    7. Heffetz, Ori, 2012. "Who sees what? Demographics and the visibility of consumer expenditures," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 801-818.
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    Cited by:

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    2. Florian H. Schneider, 2020. "Signaling ideology through consumption," ECON - Working Papers 367, Department of Economics - University of Zurich, revised Jul 2022.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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