Veblen was Right: Why People Seek Unaffordable Cars

Anna Kurysheva and Andrei Vernikov (vernikov@inecon.ru)

Journal of Economic Issues, 2024, vol. 58, issue 1, 149-169

Abstract: We study the connection between financialization and consumerism, and claim that greater availability of consumer loans affects consumerist culture and promotes the institution of conspicuous consumption. We extend the ideas of Thorstein Veblen who coined the term of “conspicuous consumption” to illustrate our thinking with the empirical evidence on car purchases financed through bank loans in Russia’s Rostov Region. We find that leveraged car buying has become embedded over the past 20 years. Social positioning drives people to seek more expensive cars, whereas getting a bank loan allows to buy an otherwise unaffordable car. We see a sign of conspicuousness in the fact that household income grows slower than the average price of a new car financed by a car loan, as well as the amount of loans. Our contribution is that a basic concept of institutional theory (conspicuous consumption) is combined with elements from other research approaches, namely the social significance of bank lending, functional differentiation of credit, and the effects of financialization.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00213624.2024.2307803 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:58:y:2024:i:1:p:149-169

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MJEI20

DOI: 10.1080/00213624.2024.2307803

Access Statistics for this article

More articles in Journal of Economic Issues from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst (chris.longhurst@tandf.co.uk).