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What are Veblen goods? |
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Answer» There are some goods (like diamond) that are purchased, not for their intrinsic worth, but for their ‘snob-appeal’. They are cases of what Veblen called ‘ Conspicuous Consumption’ or Articles of ostentation. When price of such goods rise their use becomes more attractive and they are purchased in larger quantities. If fish becomes more costly, some people will buy more of it just to show that they are rich enough to afford it. On the other hand, as the price of Veblen goods falls, their capacity to perform the function of ostentation diminishes. Hence, they are purchased less. |
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