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Conspicuous Consumption in a Recession
Toning it Down or Turning it Up?

Authors:

Young Jee Han
Joseph C. Nunes
Xavier Drèze

Publisher:

Journal of Consumer Psychology
under review

Abstract:

The media and pundits agree; the recession has led to the demise of conspicuous consumption. Wealthy consumers are reportedly abandoning luxury goods that prominently display their brands for more subdued designs. Utilizing data collected from designer handbag manufacturers Louis Vuitton and Gucci, both before and in the midst of the recession, this research challenges the conventional wisdom. We find products introduced during the recession display the brand far more prominently than the products withdrawn during the same period. These results suggest a need to signal status using luxury brands persists during economic downturns. We also find both manufacturers introduced products at significantly higher prices while trimming the number of products offered.