Status Goods : Experimental Evidence from Platinum Credit Cards
This paper provides novel evidence on status goods, using a series of field experiments with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, the paper shows that demand for the platinum card gr...
| Main Authors: | , , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/432691494944222346/goods-experimental-evidence-from-platinum-credit-cards http://hdl.handle.net/10986/26756 |
| Summary: | This paper provides novel evidence on
status goods, using a series of field experiments with an
Indonesian bank that markets platinum credit cards to
high-income customers. In a first experiment, the paper
shows that demand for the platinum card greatly exceeds
demand for a nondescript control product with identical
benefits, suggesting demand for the pure status aspect of
the card. Transaction data reveal that platinum cards are
more likely to be used in social contexts, implying social
image motivations. Combining price variation with
information on the use of the card sheds light on the
magnitude of the demand for social status. A second
experiment provides evidence of positional externalities
from the consumption of these status goods. The final
experiment shows that increasing self-esteem causally
reduces demand for status goods. This suggests that part of
the demand for status is psychological in nature, and that
social image is a substitute for self-image. |
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