At this point, an economist would tend to usher in the argument made by
Thorstein Veblen, an American economist and sociologist, who, in 1899,
put forward the idea of “conspicuous consumption” in his classic
takedown of capitalism, “The Theory of the Leisure Class”. So-called
Veblen goods reverse the normal logic of economics. With most goods,
demand falls as price rises; with Veblen goods, the higher the price,
the higher the demand, for the more expensive they are, the more
effectively they proclaim the status of their owners. The gap between
the cost of producing a Birkin and the price tag suggests that it falls
into this category.
Yet in a couple of ways, Birkins do not look
like classic Veblen goods. First, they’re not all that conspicuous.
Almost everyone can identify the provenance of Gucci’s double-G spangled
Dionysus shoulder bag; only initiates can spot a Birkin. So Veblen’s
theory needs to be adapted to explain the power of inconspicuous but
expensive goods. The authors of “Signalling status with luxury goods:
the role of brand prominence”, which appeared in the Journal of
Marketing in 2010, do so by dividing the rich into two groups:
“parvenus”, who want to associate themselves with other rich people and
distinguish themselves from have-nots, and “patricians”, who want to
signal to each other but not to the masses. They theorise that more
expensive luxury goods, aimed at patricians, will have less obvious
branding than cheaper ones. Sure enough, they found that Gucci and Louis
Vuitton charge more for quieter handbags and Mercedes slaps bigger
emblems on its cheaper cars. People who cannot afford luxury but want to
look as if they can (“poseurs”) go for big logos: counterfeiters
usually copy louder goods.
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