Conspicuous
Consumption Effect
 The conspicuous consumption effect is
where demand for a good is still high even at high prices, this is due to the
snob effect, where because the product is expensive it is usually seen to be of
high quality and have a strong brand, therefore people buy it. This defies the
law of demand in the opposite effect to Giffen goods.Therefore the demand curve will now be positively correlated for goods that experience a CCE.
Examples of goods that may experience the CCE include high-brand watches like Rolex, high-branded cars e.g. Jaguar or Mercedes.
Page last updated on 20/10/13
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