Probe - Accounting, Auditing and Taxation

Understanding the popularity of luxuries: The Veblen effect and consumer behavior

Yunzhi Lin

Australian National University

DOI: https://doi.org/10.59429/paat.v7i2.10292

Keywords: Luxuries; Law of demand; Veblen good; Veblen effect

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Abstract

This study aims to investigate the reason for inverse relationship between price and demand of luxuries. We used both qualitative and quantitative analysis to understand the mechanism of basic reason -Veblen effect. We concluded four reasons: high quality of product, satisfaction of consumers’ vanity, necessity for socialization, uniqueness of product. We also mentioned the notice points of this analysis in conclusion.

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