Conspicuous consumption and the rising importance of experiential purchases

Abstract

More than 100 years ago, the term conspicuous consumption was coined. In the economist tradition, emphasis was always on the demonstration of wealth, income, and status by material purchases. However, conspicuous consumption not only means the ostentation of wealth but also the demonstration of something symbolic that is more immaterial. There is an increasing importance of immaterial experiences over material things in the current cultural climate. This study investigates the role of conspicuous consumption for vacation decision-making as an example of an experiential purchase. The study found that communicating about vacations with others is important and increases by the ubiquitous use of social media. Two conspicuous consumption factors are found, namely those of (a) status and wealth and (b) identity demonstration. The first factor plays little or no role in holiday choice. The second is found to be of importance and is characterized by items such as having unique experiences, showing other people who you are, and visiting trendy locations. Thus, with a holiday one wants to show more of his or her personality and identity than of status and wealth. This fits into other empirical research in which it is shown that experiences make people more happy than material possessions.