A Test of Conspicuous Consumption: the Relationship between Elasticity and Observability of Consumption Items of Iranian Urban Households

Document Type : Research Paper

Authors

1 Faculty of Economics, University of Allameh Tabatabae’i, Tehran, Iran.

2 Faculty of Economics, University of Tehran, Tehran, Iran.

Abstract

Consumption decisions, in addition to directly affecting the well-being of households, are signals to other members of society. This problem is introduced in the economic literature as conspicuous consumption, where the cultural and social aspects of consumption are explored. Based on Heffetz's (2011) study, the present study tests conspicuous consumption among Iranian households. The main question of the research is to examine the relationship between income elasticities and the degree of observability of household consumption items. The relationship between observability (conspicuous consumption) and income elasticity of 36 consumption groups has been investigated. The observability index was calculated from the responses of 250 urban households to the designed questionnaire, and the income elasticities were calculated based on the household budget data of 2015 of the Iran Statistics Center and through non-parametric estimation. Despite showing the alignment of elasticity and observability in many consumer items, the results of the study do not confirm the significant relationship between the two mentioned indicators for the urban society of Iran.

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References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 59, Issue 3 - Serial Number 148
December 2024
Pages 444-464

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History

  • Receive Date: 17 June 2024
  • Revise Date: 29 October 2024
  • Accept Date: 28 December 2024

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