explaining conspicuous consumption 17
just as easily chosen a “diet” consisting of higher teachers’ wages, invest-
ment in carbon- reduction measures, and universal health care. While the
cost of these substitutes may be greater than the first set of options, they
are less conspicuous and less “luxurious,” and thus for prestige-signaling
purposes, they may be deemed less desirable despite their higher price.
The Utilities of Consumption
It is important to note that conspicuous consumption should not imply a
complete lack of instrumental value. Even luxuries deliver some “func-
tional” utility. Hence, an analysis of Veblen effects must distinguish be-
tween the primary and secondary utilities of consumption.
The primary utility is derived as “a consequence of the direct service of
the consumption to enhance life and well- being on the whole,” whereas the
secondary utility is an “evidence or social confirmation of the consumer’s
relative ability to pay” (Basman, Molina, and Slottje 1988 , 531 ). The two
utilities are in conflict with each other: one seeks to minimize cost while
the other wants to increase it; one tries to maximize instrumentality while
the other seeks to emphasize luxury and extravagance; one is inward look-
ing while the other is directed at others. Thus, prestige considerations can
overlap with considerations of security, deterrence, and welfare without
being mutually exclusive. Veblen summarizes the overlap between these
two dimensions of utility eloquently.
It is obviously not necessary that a given object or expenditure should be ex-
clusively wasteful in order to come under the category of conspicuous waste.
An article may be useful and wasteful both, and its utility to the consumer may
be made up of use and waste in the most varying proportions.... It would be
hazardous to assert that a useful purpose is ever absent from the utility of any
article or any service, however obviously its prime purpose and chief element is
conspicuous waste; and it would be only less hazardous to assert of any primar-
ily useful product that the element of waste is in no way concerned in its value,
immediately or remotely. (Veblen [ 1899 ] 1979 , 100 – 101 )