Ostentation Definition

What is Ostentation?

Ostentation refers to the excessive and unnecessary display of wealth, possessions, or power that is intended to attract attention, admiration, or notice. In daily life, ostentation refers to the act of impressing others through pretentiousness or seeking their attention through the excessive and exaggerated display of wealth and prodigality.

Ostentation in Economics 

In economics, ostentation is related to the consumption of those goods that are considered as status symbols, and enhance the social pride of their owners. In the theory of consumer behaviour, ostentation is related to the concept of conspicuous consumption, which means the act of acquiring or consuming goods to display wealth and posh lifestyle. These goods are also called snob goods.

Ostentatious Goods

Ostentatious goods, also called the goods of ostentation, refer to goods that are rare, unique, exclusive, and very expensive. These goods are purchased and used by the rich to display their wealth and status. Ostentatious goods are bought and consumed by the elite class, not solely for their functional value, but mainly to showcase luxury and a posh lifestyle. 

Examples of Ostentatious Goods

The following are some example of ostentatious goods:

- an antique item

- a rare painting

- an expensive sports car

- a unique piece of jewellery

- an exclusive designer cloth

- an expensive wrist watch

- an expensive yacht

- an exclusive club membership

There are many business firms targeting the elite class by producing high end branded products. Some of the most expensive luxury brands are Louis Vuitton, Gucci, Rolex, Prada, Versace, Bugatti, Ferrari, Bentley, Benetti and many more.

Features of Ostentatious Goods

The following are some features of ostentatious goods:

High Price

Ostentatious goods have a high price that reflects their premium quality or prestige. A high price tag also means that only a few people from the upper class can afford to buy them. For example, the price tag of a luxury watch can be in millions of dollars. 

Limited Availability

Another main feature is the limited availability. This means that the goods will be produced in limited quantity and will not be available to everyone. Companies produced limited editions or exclusive collections to communicate exclusivity to affluent customers.

Branding

These goods are normally branded and feature the brand names and symbols associated with luxury and prestige. For example, a watch with the branding of Rolex reflects premium quality and high value.

Lifestyle

These goods are associated with a lavish lifestyle. Companies design marketing campaigns to showcase a luxury lifestyle associated with these products.

Social Signaling

These goods serve as a status symbol and provide social signaling of wealth, prestige and social standing.

Exclusive Retail Experience

These goods are sold in an exclusive retail environment through high-end boutiques and flagship stores that offer personalised and VIP treatment to customers. This kind of retail experience reinforces the luxury and exclusivity of the products.

Ostentation and Snob Effect

Ostentation is related to the snob effect, which means the desire of people to possess a unique or rare item that has a high value. For example, rare paintings, luxury sports cars, or antique items are unique, and the desire of people to possess such items is called snob effect. Since these rare items are not owned by the majority of people, their ownership exhibits exclusivity and status. 

Ostentation and Veblen Effect

Ostentation is also related to the Veblen effect, which means that the demand for a good will increase with an increase in its price. If a good is priced high, it shows a social status and exclusivity because everyone cannot buy it. This leads to its high demand by those people who want to show prestige and exclusivity. If a good has a low price tag, everyone can buy it and hence the demand from the people involved in ostentation decreases. The decrease in the price of such goods makes them less attractive to rich people because they have the mindset that high-priced goods are more luxurious as compared to low-priced goods. That’s why they are less interested in buying low price goods because they find them less exclusive which do not match their high standards.

Ostentation and the Law of Demand

Ostentatious goods or snob goods do not follow the basic concept of the law of demand, which explains that demand and price are inversely related to each other. But in the case of ostentatious goods, the demand for these goods increases with the increase in prices. Hence, ostentatious goods are the exceptions to the law of demand. For example, if prices are high for these goods, they can attract those who are more status-conscious and are willing to buy them just to show exclusivity and social status, as these goods are far away from the reach of normal individuals in a society.

But in other cases, when prices are lower, the appeal to buy these goods diminishes due to low exclusivity. Status-conscious people avoid buying these low-priced goods.

We cannot easily identify the difference between an ostentatious good and a normal good, because there is no specific boundary around the price point of these goods. We can differentiate only by considering the high prices of these goods relative to those in the same category. For example, let’s suppose a good watch is of $200. But an ostentatious watch may be priced at $100,000, $200,000, or $5,000,000 to qualify as ostentatious or valuable.

Graph of Ostentatious Goods

The ostentatious or snob goods are the exceptions of the law of demand and their demand curve is upward-sloping, as shown by the following diagram.

In this graph, we have quantity demanded on the x-axis and prices on the y-axis. This graph shows that the demand for an ostentatious good increases with an increase in its price. The demand curve for ostentation goods is sloping upward from left to right.

Negative Effects of Ostentatious Goods

The following points explain some of the negative effects of ostentatious goods:

Bandwagon Effect

A research by two professors, Professor Eaton of the University of Calgary and Professor Eswaran of the University of British Columbia, explains that there is a high demand for Veblen goods due to an increase in wealth in the economy. It has become important to buy these goods, causing a “bandwagon effect” in society. When people see elite people having luxurious goods, it creates a desire in others to own those goods.

Deprivation

Ostentatious goods can be bought by only a small percentage of people due to their high price. When low-income individuals see rich people buying expensive goods just to showcase their exclusivity, they feel depressed and deprived. 

Low Intrinsic Value

Ostentatious goods have low intrinsic value. These goods are not purchased for their intrinsic value but for the exclusivity they provide. For example, an expensive sports car that is purchased by spending millions of dollars is used for travel just like an inexpensive car. So, in terms of functions, both are the same. 

Low Economic Growth

Ostentatious goods, purchased by a small portion of society, do not contribute much in terms of economic growth. As there is a trend of rising wealth in the economy, it is leading to an increase in the prices of these products, which creates a situation again where only a small percentage can still afford them. 

Conclusion

In conclusion, ostentatious goods or snob goods are only consumed by rich people and are far away from the reach of normal individuals in society. Elite people want to maintain their social status and exclusivity by purchasing goods at premium prices just to showcase their posh lifestyle. Ostentatious goods are only purchased by a small number of individuals due to their high prices.