Due to the benefits of globalization, our society is more and more variety. We have different races live together, there are different kind of housing unit people can live, even for a single water bottle, we have a different brand and the different price for it. People can buy 15 dollars Hanes, and they can wear several thousand Burberry coat. People facing a choice every single day, but if a person has the enough financial situation, he/she may tend to buy the broad one even the thing he/she buy are almost the same. Why does this phenomenon happen?
According to Vanessa Page’s research, there are several reasons for why people tend to buy luxury goods. The first one is consumers are not always rational when they buy stuff! Some people wait overnight for buy an iPhone even Samsung have better feature and technology, even XiaomMi offered far lower price. XiaoMi and Samsung have all the functin iPhone do, but why people still buy IPhone, not Samsung or XiaoMi? People think the non-luxury goods are inferior. Other people concentrate on more money means better quality even it is not.
The second reason for this is Self-Esteem. In China, young people feel shame take a XiaoMi cell phone out; even the quality are the same as iPhone even better. But Xiaomi is not as expansive as iPhone do, young people think to take a Xiaomi is showed they are poor people. They loan money from the bank to buy iPhone that will makes them looks rich; even they know it may lower their quality of life. Also, that maybe the reason why rich people buy BMW, not Hyundai. Even these two brand have almost the same function. Ordinary citizens need a car to ride instead of walking, what is the difference of 20,000 dollars Hyundai and 100,000 dollars BMW?
Sometimes weather people financially comfortable or not, they tend to buy the broad one to show off, or get acceptance of others to make others think ‘Oh, this guy is so rich!’. To make them more trust they are a discerning buyer, they convince themselves that more expansive things have better quality.
I have a friend, his father loan money from the bank to buy a Porsche to show off. The reason his father said is Bentley is more comfortable, and the quality is excellent. If he buys a Hyundai, it may need maintenance all the time, and it cost a lot. But the truth is Porsche’s quality is worse than Hyundai, and the maintenance fee is a lot of higher than Hyundai. And this car makes his family’s financial situation worse, even affct their normal life. Is that worth?
I am not saying buy a luxury good means irrational consume, but if you overdrew your band account, which happens a lot in an Asian country, to buy luxury good it may be irrational consume.
Here are a Youtube video talks about what is irrational consumer behavior, it may help you understand what exactly is irrational consumer behavior.
I agree with your idea. I have a friend who would spend 3000$ to buy a sneaker. He said that’s worthy because that sincere is christian louboutin. I have to admit that that sneaker looks very cool, but I do not think it worth 3000$. Hers’s another website talks about irrational consumer. http://www.theatlantic.com/business/archive/2013/01/the-irrational-consumer-why-economics-is-dead-wrong-about-how-we-make-choices/267255/
This idea is really interesting to think about. I think there are two main reasons that people spend large amounts of money on expensive things. The first would be to impress others. And the second would be to increase their own quality of life. Those reasons don’t have to be mutually exclusive either. For example, having others admire you can make your life better, if you have a good life, people generally admire that. However, I disagree with the idea of irrational decisions. I believe that all decisions (in terms of consumerism) are rational. If someone wants to buy an expensive car when they already have a car, it’s their decision. They have a good reason for it. It’s rational to them. Because you may see it as irresponsible, that does not mean it is an irrational decision.
In the future I hope to work in the consumer research field so the psychology behind why people purchase the things that they do absolutely fascinates me. The fact that the mere presence of others can cause our consumer behavior to change so radically baffles me. However, I have fallen victim to this flaw in human nature. When I was at the beach with my friends we decided to go to the outlets on a rainy day. I started the day with the intention of not spending more than $60. Seven stores later and I was already more than $100 deep and was not planning on stopping any time soon. You get so caught up in the moment and the rush of finding something you truly love causes one to lose their sense of reason and their impulses drive their behavior. If you see your friends spending money on things you cannot help but feel the need to join in due to avoiding feeling left out or that you are the cheap one of the group.