The cost of status consumption

Branded selling is so pervasive in our society there is virtually no refuge from viewing advertisements aimed at convincing us that we must purchase a certain named product. Even the lunch trays in airplanes are now covered with ads. It is amazing that years after purchasing a car, the owners are still driving around with a decal and or a license plate holder advertising the dealer where the car was purchased, many of whom have long gone out of business. Even the receipts you get at the store now carry a heavy dose of advertising and special sales promotions.

Our susceptibility to brand advertising is linked to our propensity to make status purchases. We may be able to find exactly the same quality or even the same goods at Walmart or other discount outlets, but we still pay more for the same product. The generic oat cereal may be exactly the same as Cheerios, but we buy the brand. I have known people who would literally rather die than eat cracked wheat. Not because they didn't like the flavor etc. but because they associated eating cracked wheat with poverty. The same people would pay five times more for cosmetics or clothes, simply because they came from a prestigious department store rather than from an outlet.

It is absolutely undeniable that consumers will purchase brand-oriented products and pay a large percentage of the price for advertising when the higher priced products are only symbolically different but not functionally different from lower-priced products. For a good discussion of this phenomenon see Schor, Juliet. The Overspent American: Upscaling, Downshifting, and the New Consumer. New York, NY: Basic Books, 1998.

If you doubt this conclusion, go into any mall and sit and watch the people who pass by and see how many logos and trademarks you can count on shoes, shirts and pants.

Why is this an issue? Do our children really need babygear from Fisher Price? Will our child's development be stunted because we don't buy him a GeoAir or her a Snuggle-Kins baby swing? will our lives be of any less value if we drive a Hyundai rather than a BMW? Thinking about how and why we make purchases is one large step to financial independence. It is also part of living in the world and not being of the world. If we purchase a toy for our child or grandchild and find it in pieces scattered around the house, doesn't that tell us something about the real value of the product? Think of all the great men of history who grew up without Legos?

Let's think about our needs and not our wants.