Duesenberry and Veblen: The Demonstration Effect Revisited

A Short-Run Crude Oil Price Forecast Model with Ratchet Effect

“…See, for example, Bansak et al (2007). 4 See for example, Duesenberry (1973 and1974) and McCormick (1983). Daily WTI spot prices, obtained from Reuters, were converted to monthly averages to correspond with the inventory data which is only available at a monthly frequency.…”

The History of Attitudes Towards Interdependent Preferences

“…One can view Duesenberry's work as a continuation of Veblen's, given that there are many common points concerning income and consumption comparisons, and also concerning the role of the demonstration effect (see McCormick 1983). One can view Duesenberry's work as a continuation of Veblen's, given that there are many common points concerning income and consumption comparisons, and also concerning the role of the demonstration effect (see McCormick 1983).…”

“…The next major analytical use of the concept of interdependent preferences appeared in James Duesenberry’s main book, Income, Saving and the Theory of Consumer Behaviour, published in 1949. One can view Duesenberry’s work as a continuation of Veblen’s, given that there are many common points concerning income and consumption comparisons, and also concerning the role of the demonstration effect (see McCormick 1983). In particular, Duesenberry is known as the proponent of the relative consumption hypothesis, the basic idea of which was that “any particular consumer will be influenced by consumption of people with whom he has social contacts” (Duesenberry 1949, p. 48).…”

Nonlinear Thermodynamics and Social Science Modeling: Fad Cycles, Cultural Development and Identificational Slips

“…What is considered fashionable arises, in fact, from two separate effects. The two effects, as Malcolm Rutherford (1987) shows, are amalgamated and inadequately differentiated in the well-known concept "conspicuous consumption" advanced by Thorstein Veblen (1979)-Veblen's concept combines the effect afforded by "affiliation good" with effect furnished by "status good" (Khalil, 1996), The affiliation effect, stressed by Ken McCormick (1983), entails the bandwagon or demonstration utility arising from the want to emulate the fashionable inclinations of one's affiliation group in order to produce conversation and socialization. The status effect, emphasized by Harvey Leibenstein (1950), involves the snob effect as it relates to the positive sloping demand curve for status goods (Ng, 1987), In this regard, John Rae (1834, 266) anticipated Veblen: The "enjoyment afforded by the [vain] articles consumed must evidently have arisen, almost altogether, from the high price they cost," Rae further wrote:…”