Economicscalendar_todayLast updated: Apr 2026
What is Veblen Goods?
/ˈveblən ɡʊdz/
Luxury goods for which demand increases as the price rises — the opposite of normal goods. Higher prices signal higher status, making the product more desirable to status-conscious consumers.
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Everyday Example
A £50 bottle of wine and a £5,000 bottle of wine: the expensive one doesn't taste 100x better. Much of its value comes from the signal it sends — I can afford this. The price is part of the product.
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“Louis Vuitton famously never discounts. When the brand briefly sold excess stock at outlets in the 1980s, demand collapsed. Scarcity and high price are not side effects of the brand — they are the product.”
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Did you know?
Thorstein Veblen coined the concept of "conspicuous consumption" in "The Theory of the Leisure Class" (1899), arguing that the wealthy buy expensive goods primarily to signal status, not for utilitarian value.
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Key Insight
Veblen goods reveal that price is not just a cost signal — it's also a quality signal and a social signal. In markets where quality is hard to assess, higher price genuinely increases desirability by reducing uncertainty.
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