Conspicuous Consumption in the United States and China

Arbeitspapier

I develop a model of conspicuous consumption to empirically measure the importance of peer beliefs to Americans and Chinese. In the model, a consumer cares not only about the direct utility she receives from consumption, but also about the way her consumption pattern affects her peer group's belief about her well-being. I estimate the model on household budget surveys. According to model estimates, a Chinese consumer cares 20% more than an American consumer about peer beliefs. The absolute size of the conspicuous consumption motive in both countries is relatively small. I use the estimated model to evaluate the welfare effect of the 1990-2002 American luxury tax on automobiles. The luxury tax benefited nearly all Americans a small amount, but hurt the small fraction of consumers who love automobiles the most.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8323

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis
• Subject: behavioral economics ; conspicuous consumption ; applied microeconomics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jinkins, David
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/101855
• Last update: 10.03.2025, 11:43 AM CET