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Veblen goods

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Re: Veblen goods

#61

Post by AnimalMuppet »

yesenadam wrote: post #58
AnimalMuppet wrote: post #56

Earlier quoted context omitted.

False dichotomy. A person who can afford to spend $25K on a watch usually has some more money left after they bought the watch. You have no idea what throwawaymath does with the rest of his/her money. Maybe your judgementalism is as much a problem as their relativism? And, by the way, the point about "relativism" wasn't about moral relativism at all.

I don't see how any of that is relevant to the point: "You could have saved a dozen lives. Instead you bought a watch. I have a perfectly objective justification for holding you in perfect contempt." Okay, granted that 'perfect contempt' is a bit strong, the reasoning seems good to me, I understand it and sympathize. How much money they have left over or what they do with the rest etc doesn't affect that in the sligh…

OK, here's someone with $1M. They keep it. If $25K could have saved a dozen lives, they could have saved 480 lives. Are you outraged?

Here's someone with $1M. They give away $25K in a way that saves a dozen lives. They also spend another $25K on a watch. Are you outraged? Are you more outraged than the previous example because they wasted money on the watch? (Is that better or worse than keeping the money in the bank?)

Here's someone with $1M. They give away $975K, saving 468 lives. They take the last $25K and spend it on a watch. Are you outraged because they didn't also give away the last $25K? Does the watch blind you to the good they did? Or did they have to give away all $1M to avoid your "perfect contempt"?

See, you're judging their selfishness by the one purchase, not by the whole of their economic activity. I dispute whether that is a relevant metric.

Re: Veblen goods

#62

Post by mmt »

throwawaymath wrote: post #53
mhermher wrote: post #44

Earlier quoted context omitted.

I think the difference is that the hobby is the thing you do , not the act of buying itself. I have a probably un-utilitarian hobby of building/upgrading maintaining my desktop computer. But still, the hobby is the building/upgrading/maintaining part, not the buying part, using the thing is great too, but I probably don't purely need everything I've put into it. So in a way, I don't get it either. With the watch exam…

There are conferences and meetups you can go to for the purpose of hanging out with other watch collectors and geeking out about watch features. Buying the watch is not the hobby, wearing it is.

> Buying the watch is not the hobby, wearing it is.

I'm not sure I see the distinction between "wearing it" and merely "owning it", as they both seem somewhat passive activities (if you'll pardon the oxymoron).

In other words, I'm asking, is the hobby one of collecting (as with stamps or coins), or is there something involved in the wearing that is the fundamentally interesting/engaging part of the hobby?

Perhaps what most commenters (including me) are skeptical of is that hobbies have also been known as "pastimes" and are, presumably enjoyable, ways to pass the time.

I suspect that most here would agree that for "expensive" hobbies, such as high-end computer gaming, automotive racing, or aviation, they would still participate in it and call the hobby by the same name if they didn't personally own the equipment necessary to engage in their chosen activity (and merely had unrestricted, or even shared/restricted, access to it).

I'm not so sure this is the case, however, for something like art collecting. If that person doesn't get to keep the art, isn't that really just an art buyer, not a collector?

Re: Veblen goods

#63

Post by cjlars »

I don't have a theory fully worked out for this, but I'm half convinced that rents in HCOL coastal cities fit into this framework. Sure, it's nice living in San Francisco, but you can get the same or better weather in smaller coastal towns, get more space and live better on a cost of living adjusted basis in a whole lot of other places. But still people come to the big cities and struggle to make it financially.

The good jobs and appreciating real estate, admittedly limit how well this theory fits together, but a big HCOL city is prestigious and exotic in large part because of, not despite, its price.

Re: Veblen goods

#64

Post by dpark »

cjlars wrote: post #63

I don't have a theory fully worked out for this, but I'm half convinced that rents in HCOL coastal cities fit into this framework. Sure, it's nice living in San Francisco, but you can get the same or better weather in smaller coastal towns, get more space and live better on a cost of living adjusted basis in a whole lot of other places. But still people come to the big cities and struggle to make it financially. The…

A HCOL city brings a bunch of things together that you can't get all together elsewhere. Critically:

1. Jobs 2. People 3. Events/activities

You can pay the San Francisco premium and have a massive job market, a million people to befriend/date/learn from/etc, and thousands of activities and experiences to engage in constantly. Or you can live in a small town with far fewer job opportunities, far fewer people, and far less to do.

Small town life is not a bad choice if it's what you want. But if you want to live in a lively city, you're going to pay for it, because a lot of people want that life and you're competing with them for a space to do it.

Now, if you're talking about Palo Alto, maybe.

Re: Veblen goods

#65

Post by saalweachter »

girvo wrote: post #45
dagw wrote: post #41

Earlier quoted context omitted.

Depends a lot on the knock off. Some are terrible. I have a colleague that wears an "Omega" that is laughably bad. Some of the better ones though are much harder to spot.

I have a Rolex knock off, purchased in the mid 2000’s in HK for $200AUD that is so good that two watch repair places I’ve taken it to have declared it one of the best fakes they’ve ever seen. Which is quite amusing because I got it mostly as a joke! It’s quite a lovely mechanical watch on its own, even without all the “Rolex” bits.

My favorite fake Rolex anecdote comes from my days in comparison shopping. There are three ways to get paid on the internet, for impressions, for clicks and for actions (eg, "actually buying something"). The latter typically pays a revenue share, which varies based on the item. Electronics have a tiny profit margin and usually pay something like 1%. Clothing has a giant profit margin and frequently paid 10-30%.

The highest revenue share I saw was for a fake Rolex watch (which was marketed as a fake!), which had a 50% revenue share.

Re: Veblen goods

#66

Post by akeck »

My theory about the meteoric rise in US undergraduate tuition since the early 1980s is that colleges and universities realized they could turn undergraduate degrees into Veblen goods.

Re: Veblen goods

#67

Post by saalweachter »

moate wrote: post #22
ghaff wrote: post #3

Earlier quoted context omitted.

I'm more of $30 Timex guy myself for day-to-day wear. But there are people who appreciate the craftsmanship associated with high-end watches. There also is such a thing as fashion which I don't personally much care about (within reason) but many do. Most people who have some amount of money spend it on things that aren't strictly utilitarian.

You're all fools! All you need is a good stick and the sun's light and you can tell the time of day! Wasting 30 dollars on a watch! Joking aside, there are people who refuse to ascribe anything BUT utilitarian value to things as a sort of anti-consumerist view. Going to be hard to convert them.

What, you need a stick? :-)

(In all seriousness, one of the most common ways I check the time, besides my phone unlock screen, is checking how much sunlight I have left by the "1 hand above the horizon = 1 hour" method.)

Re: Veblen goods

#68

Post by cjlars »

dpark wrote: post #64
cjlars wrote: post #63

I don't have a theory fully worked out for this, but I'm half convinced that rents in HCOL coastal cities fit into this framework. Sure, it's nice living in San Francisco, but you can get the same or better weather in smaller coastal towns, get more space and live better on a cost of living adjusted basis in a whole lot of other places. But still people come to the big cities and struggle to make it financially. The…

A HCOL city brings a bunch of things together that you can't get all together elsewhere. Critically: 1. Jobs 2. People 3. Events/activities You can pay the San Francisco premium and have a massive job market, a million people to befriend/date/learn from/etc, and thousands of activities and experiences to engage in constantly. Or you can live in a small town with far fewer job opportunities, far fewer people, and far…

That explains the draw of SF vs Monterey, but not necessarily SF vs Houston. Why do the most prestigious cities reliably stay the most prestigious cities, if not for the prestige itself being the draw?

As I said, I'm grasping a bit because I'm not sure I fully grok it. But there is something that would be lost about Manhattan if it became cheap. I believe it's not just the three items you list, but also the concentration of people that not only want to, but crucially, can afford the price of entrance. Beverly Hills comes to mind as an example, why do the rich and famous want to live there if not to also be surrounded by other rich and famous? Perhaps that's closer to the common link you mention in Palo Alto.

Re: Veblen goods

#69

Post by flubert »

yesenadam wrote: post #58
AnimalMuppet wrote: post #56

Earlier quoted context omitted.

False dichotomy. A person who can afford to spend $25K on a watch usually has some more money left after they bought the watch. You have no idea what throwawaymath does with the rest of his/her money. Maybe your judgementalism is as much a problem as their relativism? And, by the way, the point about "relativism" wasn't about moral relativism at all.

I don't see how any of that is relevant to the point: "You could have saved a dozen lives. Instead you bought a watch. I have a perfectly objective justification for holding you in perfect contempt." Okay, granted that 'perfect contempt' is a bit strong, the reasoning seems good to me, I understand it and sympathize. How much money they have left over or what they do with the rest etc doesn't affect that in the sligh…

Isn't there some trickle down effect though? Is there a good way to quantify it? Someone pays $25k for a watch. They probably paid income tax or capital gains tax on the income they earned on that $25k. And then there could have been a sales tax and/or a luxury tax. But the watch manufacturer pays the watchmakers and for raw materials and marketing and its capital investment in buildings, etc.. And those watchmakers buy houses who were constructed by someone, and the raw materials were mined somewhere. Is there any systematic theory of moral economics which tries to rank these complicated things given some basic moral tenets/axioms? Like buying food for a starving village is better than setting fire to a stack of $100 bills which is better than hiring mercenaries to murder the villagers. It seems like the $25k watch transaction is between the buying food and burning cash. But what about investing that $25k in the index funds? Is that better than buying the watch because it cold potentially help companies which are creating vaccines in the future? Or is it worse than the watch case, because it is also proping up companies polluting the atmosphere with CO2 currently? Is it better to spend the $25k on a fancy watch, or a non-decorative chunk of gold? Is it better to buy one $25k watch, or twenty-five $1k watches?

Re: Veblen goods

#70

Post by flubert »

jasode wrote: post #8
Sohcahtoa82 wrote: post #2

I've never understood the desire to own things like Rolex watches. It's a watch. It tells you what time it is. You can get a pretty durable one that'll last you nearly a lifetime for under $100, especially if you get a digital one since there's no moving parts to break. So why spend $5,000+ on one? I mean, yeah you might want to get something fashionable and shiny, but that doesn't require a $5,000 purchase. I feel t…

>It's a watch. It tells you what time it is. I'm not a fancy watch buyer but I'll try to explain some of the thinking. To luxury buyers, it's not a "watch". Instead, it's "jewelry for the wrist that just happens to tell time." Therefore, explaining the technical superiority of the quartz crystal accuracy of a $10 Casio watch compared to the mechanical springs of a Rolex watch is an ineffective critique. It's not even…

The Last Psychiatrist has an intersting take on luxury watchery:

https://thelastpsychiatrist.com/2011/11/luxury_branding_the_...

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