The Choice Lab seminar with Gautam Rao
We would like to invite you to a seminar with Gautam Rao, Assistant Professor at the Department of Economics, Harvard on 1 June. Rao will give a presentation titled "Status Goods: Experimental Evidence from Platinum Credit Cards".
Date: Thursday, 01.06
Location: E209/E210, Department of Economics, NHH
The paper is written jointly by Gautam Rao, with Leonardo Bursztyn (University of Chicago and NBER), Bruno Ferman (Sao Paulo School of Economics), Stefano Fiorin (UCLA Anderson) and Martin Kanz (World Bank).
|This paper provides novel field-experimental evidence on status goods. We work with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, we show 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. In a second experiment, we provide 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. We infer that part of the demand for status is psychological in nature, and that social image is a substitute for self image.|