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Conspicuous Consumption

Thorstein Veblen coined the term conspicuous consumption around the turn of the 20th century. Consumers purchasing a $100,000 Porsche Carrera when a $15,000 Hyundai would get them where they want to go illustrates the basic concept of conspicuous consumption. Economists postulate that consumers derive utility from the consumption of goods. Veblen would say that this utility comes from two distinct characteristics of goods. The first is what he called the serviceability of a good. This basically means that the good gets the job done. Both the Porsche and the Hyundai will get you from New York to Boston in about the same time—unless you are more inclined to exceed the legal speed limit in a Porsche. The other characteristic of a good is what Veblen ...

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