Conspicuous Consumption

Thorstein Bunde Veblen (1857 - 1929) was an American economist and sociologist. He was the head of the Efficiency Movement and most famous for his Theory of the Leisure Class (1899). It was this paper that introduced the theory of Conspicuous Consumption.

Veblen believed social customs are linked to economic customs and therefore research and understanding in one leads to a better understanding of the other. Introducing terms such as “conspicuous consumption and “pecuniary emulation” perked interest in fellow economists and sociologists despite is reputation. His goal was to for economists to see that social and cultural changes directly related to the economic changes.

The Theory of the Leisure Class looked at the 19th century American society and explained consumer behaviour was severely affected by money related simulation.

Veblen was professor at Stanford University from 1906 to 1909, Missouri University from 1911 to 1918 and the New School for Social Research, New York, 1918-1922, however his way of thinking, his criticism of the contemporary American market economy, his analysis of American society/ culture as well as his personal character made him an outsider.

The basis of Thorstein Velbens’ ‘Conspicuous Consumption’ is that the when consumers spend money, they spend it on luxury goods and services (should they be able to afford it). They do this conspicuously in order to publically display their economic power in addition to their social status.

Veblen was one of the pioneers in the study of consumer behavior and behavioral economics.

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