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Veblen goods

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Re: Veblen goods

#71

Post by dpark »

cjlars wrote: post #68
dpark wrote: post #64

Earlier quoted context omitted.

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 concentra…

Yes, clearly much of the appeal of Beverly Hills is the proximity to wealth. I don't think that's nearly as applicable to San Francisco, given that the proximity to wealth is countered by the proximity to homeless encampments.

I will concede that for some portion of people, the prestige of living in San Francisco is a part of the draw. There are other factors that are probably more important for a lot of people, though. Comparing to Houston, San Francisco is literally 5 times as densely populated, which changes the feel of the city drastically. Houston is larger in terms of population, but it's also massively sprawled. That sprawl drives down the price of homes but also makes much of the city feel like the suburbs (probably; I have not visited).

Houston also spends >100 days/year at >90F, which makes it not comparable to a coastal city for people who do highly value temperate weather.

Re: Veblen goods

#72

Post by nemothekid »

akeck wrote: post #66

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.

I don't think demand increases as the price goes up - only that colleges realized demand for an undergraduate degree was inelastic and that consumers could pay any price because they could get guaranteed loans from the government.

Re: Veblen goods

#73

Post by xevb3k »

asdignoionio wrote: post #49
arthurofbabylon wrote: post #21

Can anyone recall this effect occurring with a software product?

Apple software (kind of). It's tied to specific hardware, so it's hard to say if people are paying for the software or the hardware. I have seen people turn down free software because they mistakenly believe an expensive program must be better. But that's not really the same, since that isn't a form of showing off.

I really can’t see how that’s so. Your suggesting that if Apple products were more expensive they’d sell more?

The only instance I can see where this might be true is with the Gold Apple watch (and that’s obviously not a purely software issue):

http://uk.businessinsider.com/apple-watch-edition-sold-out-i...

But in general I can’t really see this...

Re: Veblen goods

#74

Post by taneq »

trhway wrote: post #36

read some years ago in the context of high end speakers: "so, you are're just packaging $500 of speakers in nice boxes and selling it for $80K?" "you don't understand. The people are paying for the price."

This is absolutely what happens. Once you go beyond a few $1000s of dollars, you're paying for the privilege of demonstrating that you can afford to pay that much for an entertainment center.

My father-in-law's like this. Every time he visits he tells us all about his home theatre setup and how he's spent $15k on this component and $20k on that other component, and that it was a bargain because it usually costs $35k but he got a good discount because he's friends with the store owner. You bet he is, with the stuff he buys! But hey, it makes him happy.

Re: Veblen goods

#75

Post by burfog »

charlesdm wrote: post #25
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…

I love mechanical watches, but in addition to that, it's also the only acceptable piece of jewellery for a man to wear. However, the fact that something with so many small moving mechanical pieces can actually function still blows my mind to this day.

You can also wear a plain wedding band.

Re: Veblen goods

#76

Post by tonyedgecombe »

newnewpdro wrote: post #19
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 silly is that wearing $5k+ on your wrist is effective at influencing people. What's even more silly is your ignoring that fact. So-called status symbols are actually quite effective at getting people to pay attention to you, which is kind of important if you wish to compel them to do things.

Sometime it can work in reverse, I won't buy things from people who overtly display their wealth. If you turned up on my doorstep in an expensive car you are going to have a hard time selling me anything.

Re: Veblen goods

#77

Post by dagw »

mmt wrote: post #62
throwawaymath wrote: post #53

Earlier quoted context omitted.

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 wha…

As a "watch wearer" I find wearing the watch to be the whole point. If there was a service where I could wear different watches without owning them I would be all over that. If I could only own watches to display them in my house and never take them out I wouldn't bother.

Re: Veblen goods

#78

Post by [deleted] »

flubert wrote: post #69
yesenadam wrote: post #58

Earlier quoted context omitted.

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…

[deleted]

Re: Veblen goods

#79

Post by newnewpdro »

tonyedgecombe wrote: post #76
newnewpdro wrote: post #19

Earlier quoted context omitted.

It's silly is that wearing $5k+ on your wrist is effective at influencing people. What's even more silly is your ignoring that fact. So-called status symbols are actually quite effective at getting people to pay attention to you, which is kind of important if you wish to compel them to do things.

Sometime it can work in reverse, I won't buy things from people who overtly display their wealth. If you turned up on my doorstep in an expensive car you are going to have a hard time selling me anything.

Sometimes that filter is a feature, you probably wouldn't make a good minion.

Re: Veblen goods

#80

Post by dredmorbius »

Veblen goods offer signalling opportunity, and must be both immediately cognisibly to the intended signalling audience (though not necessarially others) and high in cost in order to manifest credible signalling. They are not utility or consumption goods, but information goods.

They exist where the underlying trait being signalled is difficult to communicate clearly or effectively, a circumstance especially true of social status signalling. Paradoxically, the hyperwealthy need not signal so loudly (they themselves are sufficiently well-known), but as one descends the ranks, say, below the top ten and above, say, the 90%ile (higher or lower as you prefer), that signalling becomes more necessary and costly.

This is similar to a whole set of fad-driven behaviours, ranging from speech and etiquette to clothing, diet, music, politics, management, and programming fashions, where the underlying domain is complex. Eventually the faad itself becomes dominated by poseurs whose false affectation dilutes the signal.

https://old.reddit.com/r/dredmorbius/comments/62uroa/clothin...

Related, diamonds & gemstones, and loss or clear signalling effect as inexpensive alternatives emerge. See earlier:

https://news.ycombinator.com/item?id=17183929

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