Conspicuous Consumption

The term “Conspicuous Consumption” was coined by American economist and sociologist Thorstein Veblen in his 1889 book, “The Theory of the Leisure Class.”

This concept describes how wealthy people spend large amounts of money on goods and services as a way of showing their status.Conspicuous consumption denotes the act of buying many things, especially expensive things, that are not necessary to one’s life, done in a way that will make people notice the purchases.This type of conspicuous consumption was certainly not a new device in 1899. In fact throughout the industrial revolution and slightly prior to it, families who had made money often attempted to jump to a higher class standing by making excessive and unnecessary purchases.As proposed by Thorstein Veblen in the 19th-century, conspicuous consumption (spending money to buy goods and services for their own sakes) explains the psychological mechanics of a consumer society, and the increase in the number and the types of the goods and services that people consider necessary to and for their lives in a developed economy.

Diamonds or jewellery in the broader sense, are other Veblen goods and so are high-end watches. One of the most cited Veblen goods are luxurious cars like Rolls Royce or Bentley. Consuming these goods is not very practical but people often use them to show that they have attained a certain level of material comfort. They use them to maintain or gain higher social status.

Veblen argued that, through “conspicuous consumption” often came “conspicuous waste”. Though the term”conspicuous consumption” was originally intended for the rich, but with the improvement in the living standards and the growth of the middle class, this phenomenon is widespread among the middle class and emerging economies

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