Veblen effect

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Veblen effect

a theory of CONSUMPTION that suggests that consumers may have an UPWARD-SLOPING DEMAND CURVE as opposed to a downward-sloping DEMAND CURVE because they practice CONSPICUOUS CONSUMPTION. A downward-sloping demand curve implies that the quantity demanded of a particular good varies inversely with its price (as price increases, quantity demanded falls). The Veblen effect suggests that quantity demanded of a particular good varies directly with a change in price (as price increases, demand increases). See also VEBLEN, INCOME EFFECT, ENGELS LAW.

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Imported from Turkey in the late 1500s, tulips were a status symbol, so it is reasonable to assume that the beautiful and durable flowers took on the characteristics of a Veblen good (we discussed Veblen goods in A Digression on Diamonds) whereby higher prices spurred more demand and, therefore, higher prices.

Capital Perspectives: History lesson Tulip Mania

Throughout the LP, Ojeda demonstrated his knack for empathetic collaborations with various vocalists, but the hook-laden earworms "Home" and "Summer," both featuring New York-based artist Veblen Good, were stand-outs.

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If every branded car is a Veblen good - that is, something you want precisely because it is expensive, to flag to the world your ability to own it - then the Volvo is a peculiar inversion, the car you buy that looks less flash than it is, to show the world that you're not the kind of person who shows off what they've bought.

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3D-printed may lose its status as a Veblen good as scarcity requires

The end of post-sale confusion: how consumer 3D printing will diminish the function of trademarks

In a city where food items have turned into Veblen goods (think P600 bags of salted egg potato chips), an P800 meal is cheap for conspicuous consumption.

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In actuality, Veblen goods account for only thirteen percent of all counterfeit products (Government, 2013).

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If these are so-called Veblen goods - those of which people consume more when the price rises - then this is one potential tax rise whereby the amount of tax raised increases by more than the implied increase in the tax rate.