The Dark Side of Luxury: Social Costs of Luxury Consumption

Abstract

Extant research demonstrates that luxury goods are beneficial signals that bestow upon individuals social benefits that range from positive evaluations to compliance. In contrast to this perspective, the current work explores the idea that luxury goods can carry significant negative social costs for actors. Across four experiments, the social cost of luxury is examined. Although individuals who display luxury goods are ascribed higher status, they can pay a hefty tax when it comes to warmth. The social costs of luxury consumption appear to be driven by impression management concerns rather than envy. Consequently, whether the consumption of luxury goods yields positive or negative social consequences for an actor critically depends both on whether status or warmth is relevant for a decision and observers’ own lay beliefs about luxury consumption. Overall, this work reveals the more complex psychology of individuals’ interpretation and response to actors’ use of luxury goods.