Occupational Membership, Peer Effects and Conspicuous Consumption: An Analysis of the UK Living Costs and Food Survey

We examine peer-effects in the visible expenditures of six professional/managerial groups. Using Britain’s Living Costs and Food Survey (2009-2016), we test whether there are distinctive patterns in their respective visible consumption, controlling for observable characteristics. We explore peer effects using a cell-means approach and find differing magnitudes of co-movement, or conformity, across the professional classes with their peer-groups (defined by age and region). In professional groups associated with higher rewards from conspicuous consumption, increases in status-signalling are more strongly associated with conformity to peers than with own income growth. We also find a strong female “breadwinner” effect on visible consumption.

Keywords

household consumption, peer effects, occupation, conspicuous consumption, visible expenditure

JEL Classifications

D12, D11, Z13