What are Veblen Goods - Economics UPSC notes
Veblen goods are a category of goods for which demand increases as their price rises, defying the law of demand.Luxury brands like Rolex, Gucci.
What are Veblen Goods? Definition: Veblen goods are a category of goods for which demand increases as their price rises, defying the law of demand. This is because higher prices are perceived to reflect higher quality, prestige, or social status. Named After: American economist Thorstein Veblen, who introduced the concept of conspicuous consumption in his book The Theory of the Leisure Class (1899). Key Characteristics of Veblen Goods Conspicuous Consumption: Consumers buy these goods not for utility but to display wealth and social status. Price-Demand Relationship: Higher prices make these goods more desirable, as they become symbols of exclusivity. Luxury and Prestige: Veblen goods are often luxury items associated with a brand or status. Elastic Demand at Higher Prices: Demand for these goods increases as prices rise up to a point. Examples of Veblen Goods Global Examples: Luxury brands like Rolex, Gucci, and Louis Vuitton. High-end sports cars like Ferrari and Lamborghini. Indian Context: Gold je…