The Psychology of Status: Why Consumption Means Different Things Across Cultures

Read this blog post to learn more about:

• Why consumption is driven by status, identity, and culture as much as rational choice

• How brands and luxury goods act as social signals across different societies

• Why cultural values shape what consumers buy and what those purchases communicate

• How status competition influences inequality, consumer debt, and business strategy

Consumption has been viewed as being driven by rational choice theory principles‚ stressing the role of utility and income(Becker, 1976)․ A wide-ranging psychological‚ sociological and economic literature shows that consumption is a fundamentally social activity driven by status‚ identity and cultural meanings attached to goods‚ services and brands(Belk, 1988; Bourdieu, 1984)․ Besides satisfying basic material needs‚ these goods and brands signal social class‚ social status‚ moral values and other symbolic meanings(Douglas & Isherwood, 1979)․ Any given consumption behavior can therefore in principle signify‚ depending on the context (Berger & Ward, 2010)‚ success or conformity or deviance‚ making the psychology of status central to understanding cultural differences in consumer behavior‚ branding‚ and the structure of economic inequality(Wilkinson & Pickett, 2009).․

The relation between consumption and status has been more famously analyzed by the economist Thorstein Veblen in his theory of conspicuous consumption: goods whose prices are sufficiently high to signal wealth and status(Veblen, 1899)․ In competitive societies where status is publicly displayed‚ goods such as luxury products become status symbols(Han, Nunes & Drèze, 2010)․ More recent research has shown that this signaling behavior continues in fast-growing and developing economies with high income inequality(Charles, Hurst & Roussanov, 2009)‚ where upward social mobility is a possibility and consumption is used as a signal for identity and aspirations Belk, 1988).․

Cultural values also impact status symbols (Markus & Kitayama, 1991)․ Individualist cultures often use consumption to signal individual achievement and uniqueness‚ and brands can be viewed as extensions of the self(Belk, 1988)․ When the motivation for consumption is collectivist in nature‚ it may be related to family reputation‚ social harmony‚ and group belonging‚ and status is assigned in a less direct way․ These behaviors can be explained by the cultural dimensions model developed by Geert Hofstede (Wong & Ahuvia, 1998)‚ including individualism‚ power distance‚ and uncertainty avoidance (Hofstede, 2001).․

Psychological theories that attempt to explain social identity capture the phenomenon of differential consumption (Tajfel & Turner, 1979)․ Here‚ consumer identities serve one of the self-concept's many sources since social categories provide the basis of identity and consumption helps create them (Escalas & Bettman, 2005)․ The resulting social symbols allow consumers to identify with brands and social groups‚ which they aspire to be part of‚ while distancing themselves from groups they are not interested in (Berger & Heath, 2007)․ This is especially true for young consumers‚ with many symbols coming from the worlds of fashion‚ technology‚ and lifestyle․ They can have region-specific meanings (Chaplin & John, 2005)․ A luxury brand may be associated with sophistication in one culture and materialism in another (Wong & Ahuvia, 1998)․

In terms of inequality‚ consumption-based status seeking results in overconsumption by households for positional goods at the expense of savings‚ health and education‚ and less household safety (Frank, 1985)․ This process can increase inequality because individuals with fewer resources often feel the need to consume conspicuously‚ not for the sake of saving for the future‚ but to imitate those with higher status (Charles et al., 2009)․ As status competition influences consumer debt and social comparison at the system level‚ other macroeconomic issues may also be influenced by status competition: for example‚ societies with higher degrees of status competition are more indebted (Wilkinson & Pickett, 2009)․

These dynamics provide both opportunities and ethical dilemmas for firms (Kotler & Keller, 2016)․ For example‚ global brands must consider cultural differences when signaling status as one branding strategy is unlikely to fit all markets (Steenkamp, 2017)․ Although the exploitation of status anxiety can be socially divisive and stimulate unsustainable consumer behavior (Schor, 1998) ‚ businesses increasingly try to promote sustainability‚ authenticity and social responsibility as forms of status to encourage conformance with changing cultural norms and values (Kapferer, 2015)․

Thus consumption has a material and cultural aspect‚ which is influenced by status‚ identity‚ cultural values‚ and how people consume‚ why they consume‚ and what they express with their consumption in each society (Belk, 1988)․ Understanding how markets express and institutionalize social structure and hierarchies can also benefit from the study of consumer behavior (Bourdieu, 1984)․ To understand consumption in a world shaped by globalization‚ an approach that brings together psychology‚ culture‚ and economics is needed (Wilkinson & Pickett, 2009).

Reference list:

Becker, G. S. (1976). The Economic Approach to Human Behavior. Chicago: University of Chicago Press.

Belk, R. W. (1988). “Extended Self in Consumer Behavior.” Journal of Consumer Research, 15(2), pp. 139–168. (JSTOR)

Berger, J. & Heath, C. (2007). “Where Consumers Diverge from Others.” Journal of Consumer Research, 34(2), pp. 121–134.

Berger, J. & Ward, M. (2010). “Subtle Signals of Inconspicuous Consumption.” Journal of Consumer Research, 37(4), pp. 555–569.

Bourdieu, P. (1984). Distinction: A Social Critique of the Judgement of Taste. London: Routledge.

Chaplin, L. N. & John, D. R. (2005). “The Development of Self-Brand Connections.” Journal of Consumer Research, 32(1), pp. 119–129.

Charles, K. K., Hurst, E. & Roussanov, N. (2009). “Conspicuous Consumption and Race.” Quarterly Journal of Economics, 124(2), pp. 425–467.

Douglas, M. & Isherwood, B. (1979). The World of Goods. London: Routledge.

Frank, R. H. (1985). Choosing the Right Pond. Oxford: Oxford University Press.

Frank, R. H. (2007). Falling Behind. Berkeley: University of California Press.

Hofstede, G. (2001). Culture’s Consequences (2nd ed.). Thousand Oaks, CA: Sage.

Kapferer, J.-N. (2015). Kapferer on Luxury. London: Kogan Page.

Kotler, P. & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.

Markus, H. R. & Kitayama, S. (1991). “Culture and the Self.” Psychological Review, 98(2), pp. 224–253.

Schor, J. (1998). The Overspent American. New York: Basic Books.

Steenkamp, J.-B. E. M. (2017). Global Brand Strategy. Palgrave Macmillan.

Tajfel, H. & Turner, J. C. (1979). “An Integrative Theory of Intergroup Conflict.” In The Social Psychology of Intergroup Relations.

Veblen, T. (1899). The Theory of the Leisure Class. New York: Macmillan.

Wilkinson, R. & Pickett, K. (2009). The Spirit Level. London: Penguin.