Exploring the allure of status symbols over practicality, this chapter highlights how societal pressures fuel the creation of extravagant products that cater more to signaling value than genuine need. Through examples like platinum credit cards in Indonesia and lavish weddings in India, it examines the cycle of consumption driven by a desire for social validation.
Economists have discovered an odd phenomenon: many people who use social media (even you, maybe?) wish it didn’t exist. But that doesn’t mean they can escape.
- RESOURCES:
- "When Product Markets Become Collective Traps: The Case of Social Media," by Leonardo Bursztyn, Benjamin Handel, Rafael Jimenez, and Christopher Roth (NBER Working Paper, 2023).
- "Social Media and Xenophobia: Evidence from Russia," by Leonardo Bursztyn, Georgy Egorov, Ruben Enikolopov, and Maria Petrova (NBER Working Paper, 2019).
- "Status Goods: Experimental Evidence from Platinum Credit Cards," by Leonardo Bursztyn, Bruno Ferman, Stefano Fiorin, Martin Kanz, and Gautam Rao (NBER Working Paper, 2017).
- "'Acting Wife': Marriage Market Incentives and Labor Market Investments," by Leonardo Bursztyn, Thomas Fujiwara, and Amanda Pallais (American Economic Review, 2017).
- "Measuring Crack Cocaine and Its Impact," by Roland G. Fryer Jr., Paul S. Heaton, Steven D. Levitt, and Kevin M. Murphy (Economic Inquiry, 2013).