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Economics

Veblen Goods and Conspicuous Consumption

Quick fact

The term 'conspicuous consumption' was coined by economist Thorstein Veblen in 1899 to describe the lavish spending of the wealthy, who used luxury purchases to display their social rank.

Why this is interesting

Imagine a handbag priced at $10,000 that sells out instantly, while a practically identical one at $500 gathers dust. Why would people pay more for the same function?