Economic Tidbits

Hmmm

“Veblen argued that consumption is not merely about satisfying needs, but is also used to signal status and prestige. The priciest cars may offer more nifty features and a smoother ride than a cheaper marque, but the vast difference is price is not primarily down to such advantages. Rather, the buyer is paying such cars’ value as a status symbol, which derives from the fact that very few people can afford one . . . These luxury items defy normal economic logic. In the mass market, productivity boosting innovations that allow firms to sell better products at lower prices are a route to success. For producers of conspicuous-consumption items, such cost-cutting does not conquer the market but destroys it.” Free exchange: enough is never enough, The Economist, June 8th, 2019.

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