Conspicuous consumption is the term refers to consumers who buy expensive items to display wealth and income rather than to cover the real needs of the consumer. It is the spending of money on and the acquiring of luxury goods and services to publicly display economic power—of the income or of the accumulated wealth of the buyer. It is the practice of purchasing goods or services to publicly display wealth rather than to cover basic needs. The concept is not new and has been part of society for long. To the conspicuous consumer, such a public display of discretionary economic power is a means of either attaining or maintaining a given social status. This particular type of consumption is typically associated with the rich and wealthy and has only grown with time.
The word ‘Conspicuous’ here means lavish or wasteful spending. The concept of ‘conspicuous consumption’ is the idea that consumers make explicit comparisons to others when consuming in an effort to portray actual and aspirational statuses. In the 19th century, the term conspicuous consumption was introduced by the economist and sociologist Thorstein Veblen in his book “The theory of leisure class: An Economic Study in the Evolution of Institutions.” The development of Thorstein Veblen’s sociology of conspicuous consumption produced the term invidious consumption, the ostentatious consumption of goods that are meant to provoke the envy of other people; and the term conspicuous compassion, the deliberate use of charitable donations of money in order to enhance the social prestige of the donor, with a display of superior socio-economic status. This kind of spending is generally made by people who have a considerable amount of disposable income to spend on goods and services which are not necessary but are more luxurious in nature. The theory of conspicuous consumption helps us understand the important role of consumption in the growth of economic markets and modern society’s obsession with material possessions.
Conspicuous consumption is the purchase of goods or services for the specific purpose of displaying one’s wealth. Advertising plays a major role in placing the product as a luxury item in the mind of consumers. It is swelling the luxury markets across the world. The number of luxury goods and services buyers in the developed world is being swelled by two other trends. The product has to be elegant, exclusive (branded bag, jewelry, etc.), or tailor-made for the consumer. This type of consumption is typically associated with the wealthy but can also apply to any economic class.