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How Does House Demolition Affect Family Conspicuous Consumption?

Wei Yuan1, Shuying Gong2, Jun Gao2

  • 1School of Business Administration, Hubei University of Economics, Wuhan, China.

Frontiers in Psychology
|November 15, 2021
PubMed
Summary

House demolition significantly increases conspicuous consumption among families, particularly impacting overall and average spending levels. This effect is amplified by household wealth and materialism.

Keywords:
family conspicuous consumptionhouse demolitionhousehold wealthluxury consumptionmaterialism value

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Area of Science:

  • Behavioral Economics
  • Consumer Psychology
  • Household Finance

Background:

  • Family conspicuous consumption is influenced by numerous factors, yet the impact of house demolition remains under-explored.
  • Existing literature rarely addresses the specific mechanisms linking house demolition to conspicuous consumption behaviors.

Purpose of the Study:

  • To empirically investigate the relationship between house demolition and family conspicuous consumption.
  • To examine the moderating roles of household wealth and materialism in this relationship.
  • To differentiate conspicuous consumption from luxury consumption.

Main Methods:

  • Utilized micro-data from the 2011 China Household Finance Survey.
  • Employed econometric analysis based on mental accounting theory and conservation of resources theory.
  • Conducted theoretical analysis and exploratory investigation to compare conspicuous and luxury consumption.

Main Results:

  • House demolition demonstrates a significant positive effect on household conspicuous consumption, affecting both overall and average consumption levels.
  • Household wealth and materialism value positively moderate the relationship between house demolition and conspicuous consumption.
  • Conspicuous consumption and luxury consumption are distinct, sharing similarities in motivation and pattern but differing in consumer subject and object.

Conclusions:

  • House demolition acts as a significant driver of increased conspicuous consumption in families.
  • The findings enrich decision-making theories in consumer behavior.
  • This research deepens the understanding of the nuanced relationship between conspicuous and luxury consumption.