The price of social status desire and public self-consciousness in luxury consumption

Abstract

This study examines the factors that influence what is an acceptable price for a luxury product. It considers how much people are prepared to pay for different categories of luxury products to satisfy their desire for status and to avoid public embarrassment that may result from their level of public self-consciousness. The effects of these factors, together with price consciousness, income, attachment to luxury products, and the extent to which the consumer uses price to infer the luxury level of a product, are empirically tested. Using data from U.S. consumers, the model is tested with latent moderated structural equations across nine luxury product categories. The results show that desire for status, price consciousness, and price-luxuriousness inferences influence price acceptability levels based on the product type. A series of mediating effects highlight the importance of public self-consciousness and attachment to price acceptability mainly through the price-luxuriousness inferences consumers make.