Bling is a sign to your peer group that you are not poor

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Bling is a sign to your peer group that you are not poor

Why do some groups spend more on 'bling'- conspicious consumption, - than others? To prove to their peers that they are not poor. The poorer the group you come from the more you spend on bling. Interesting study in why people buy stuff to show it off.

About seven years ago, University of Chicago economists Kerwin Kofi Charles and Erik Hurst were researching the “wealth gap” between black and white Americans when they noticed something striking.

African Americans not only had less wealth than whites with similar incomes, they also had significantly more of their assets tied up in cars.

The statistic fit a stereotype reinforced by countless bling-filled hip-hop videos: that some groups spend a lot on cars, clothes, and jewelry—highly visible goods that tell the world the owner has money.

But do they really? And, if so, why?

The two economists, along with Nikolai Roussanov of the University of Pennsylvania, have now attacked those questions. What they found not only provides insight into the economic differences between racial groups, it challenges common assumptions about luxury.

Conspicuous consumption, this research suggests, is not an unambiguous signal of personal affluence. It’s a sign of belonging to a relatively poor group.

Visible luxury thus serves less to establish the owner’s positive status as affluent than to fend off the negative perception that the owner is poor. The richer a society or peer group, the less important visible spending becomes.

On race, the folk wisdom turns out to be true.

An African American family with the same income, family size, and other demographics as a white family will spend about 25 percent more of its income on jewelry, cars, personal care, and apparel. For the average black family, making about $40,000 a year, that amounts to $1,900 more a year than for a comparable white family. To make up the difference, African Americans spend much less on education, health care, entertainment, and home furnishings. (The same is true of Latinos.)

Of course, different ethnic groups could simply have different tastes. Maybe blacks just enjoy jewelry more than whites do. Maybe they buy costlier clothes to deter slights from racist salesclerks. Maybe they spend more on cars for historical reasons, because of the freedom auto travel gave African Americans during the days of segregated trains and buses. Maybe they just aren’t that interested in private colleges or big-screen TVs. Or maybe not.

Economists hate unfalsifiable tautologies about differing tastes. They want stories that could apply to anyone.

So the researchers went back to Thorstein Veblen, who coined the term conspicuous consumption. Writing in the much poorer world of 1899, Veblen argued that people spent lavishly on visible goods to prove that they were prosperous.

“The motive is emulation—the stimulus of an invidious comparison which prompts us to outdo those with whom we are in the habit of classing ourselves,” he wrote.

Along these lines, the economists hypothesized that visible consumption lets individuals show strangers they aren’t poor. Since strangers tend to lump people together by race, the lower your racial group’s income, the more valuable it is to demonstrate your personal buying power.

Much more on the link
 http://www.theatlantic.com/...
By netchicken: posted on 15-6-2008

I knew this statistic from observation at least 10 years ago. I guess I was not qualified to write a paper on it and publish it.

This is certainly true. They used to say a while ago the same thing about Black people and cadillacs. If you just walk down the streets of America this thesis is self evident for those with their eyes and ears open.

Some ethnic groups in America have done very well for themselves by and large. Some are primarily relegated to menial labor. White people arent found in many menial jobs, not that they are all better off than other ethnic groups. It is pretty bizarre if you think about it when you compare it with other countries in Europe etc.
By IAF: posted on 15-6-2008

I wonder if you can say the same thing for teenagers?
Kids want a hot car to show off to their friends, however are they doing it as a sign of affluence?

It seems with teens and cars its the vehicle that is the center of attention ranther than the person who drives it.
By netchicken: posted on 15-6-2008

I think for Kids it depends more on their peer groups and also their parents. IF their parents are the kind of people who have made quick easy money or pamper their kids, naturally we can expect the kids to behave in predictable patterns.

I think this paper is talking about aspirations out of life. Not necessarily the immediate future.
By IAF: posted on 15-6-2008

I can't afford any bling-bling. I have a boy who expects to go to college!
By Thomas_Crowne: posted on 16-6-2008

Wow, congratulations Thomas. If your photo is a picture of you, then I'm guessing your a teenager, so don't forget to go to college yourself.

Sadly, blacks (aka North American Africans, or African Americans), as well as other groups such as the "redneck" and Mexican, are doing it to themselves, and can't seem to break the cycle. The vast majority of black women with children are not married. The father simply left, and the children not only grow up in poor neighborhoods, but also with very little guidance. No offense to women, but the mom is not nearly enough when it come to controlling kids, which often creats the incredibly stern, undeniable, (and in movies fat) black mother, but even then teens won't respect, and fear, their mother like they would thier father. You NEED A FATHER in most situations in order to raise children to become successful. The kids end up just like thier father, vicious gang members who break the law, steal from each other, fight, resist education (and therefor a better life), treat women as disposable, and continue the stereotype. It's sad, and no matter how many people recognise this cycle and break free, there are ten others who join it.
By peregrine: posted on 1-8-2008








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