Positional Goods and the Social Rank Hypothesis: Income Inequality Affects Online Chatter about High‐ and Low‐Status Brands on Twitter

Abstract

According to a social rank hypothesis, consumers who live in regions with higher income inequality will show greater interest in, and attention toward, positional goods and high‐status brands that serve a social signaling role. We analyze millions of posts on the microblogging platform Twitter for mentions of high‐ and low‐status brands. We find that luxury brands such as “Louis Vuitton” and “Rolex” are more frequently mentioned in tweets originating from US states, counties, and major metropolitan areas with higher levels of income inequality. In contrast, mentions of everyday brands such as “Walmart” or “Kmart” are more frequent in regions with a more equal distribution of income. Using sentiment analysis, we find higher valence (positivity) and arousal (excitement) for tweets that both mention high‐status brands and originate from regions with high levels of income inequality. These results corroborate the social rank hypothesis, showing that more psychological resources are allocated to positional consumption when the income gap between the rich and the poor is larger.