Talk:Veblen good/Archive 1

counnter-veblen
very nicely written..

The above added by anon 140.247.23.94 in November 2005.

I have reverted the edit on the definition of the counter-Veblen effect. In the counter-Veblen effect, preference increases as price FALLS. This has to be true since the counter-Veblen effect has to be the opposite of the Veblen effect. And, if it isn't pulling rank unfairly, could I point out that I am one third of Lea, Tarpy & Webley (1987), who coined the term, and I do know what we said! seglea 22:22, 19 July 2006 (UTC)

Example
A nice example can be found in the article Cult wine:

"on several occasions we have had difficulty selling wines at $75, but as soon as we raise the price to $125 they sell out and get put on allocation"

Cape crusaders. Decanter, June, 2006, pages 90 & 92. —The preceding unsigned comment was added by 217.185.229.58 (talk) 13:32, 29 April 2007 (UTC).

Theoretically Possible in Micro-Economics?
It may well be the case that Veblen Goods are only a theoretical proposition in Economics but they are well attested in sociology generally (see La Distinction / Pierre Bourdieu) so perhaps a little re-wording is in order. Rykalski 12:57, 7 September 2007 (UTC)

Also known as...
I remember hearing them refered to as snob goods or luxury goods before, but this may have been dumbed down in an introductory texxtbook.--AleXd (talk) 15:30, 28 March 2008 (UTC)

"Counter-Veblen effect"
The "counter-Veblen effect" mentioned in this article seems to be either a protologism or a neologism. According to WP:NEO we should avoid them if there's no reliable secondary sources about them. None are cited, a Google search doesn't give any mentions of the term outside Wikipedia mirrors, and the term is not even defined. I can imagine how pleased the anti-Wikipedia lobby would become if they found out that something like this has survived here for, oh, three years? - ulayiti (talk)  08:03, 24 October 2006 (UTC)


 * Google is not a useful tool for technical terms, there are plenty of things it will not define, yet are key concepts in economics and science in general. The fact is that a reference is cited for a book that does exist. Martin 09:19, 24 October 2006 (UTC)


 * Anyway, google does find a mention of it, here. Martin 09:26, 24 October 2006 (UTC)

It does seems strange to raise counter-Veblen:

''   * the counter-Veblen effect, in which preference for goods increases as their price falls. The first two of these, and the Veblen effect, are discussed in a classic article by Leibenstein (1950). The concept of the counter-Veblen effect is less well known, although it logically completes the family; it was introduced by Lea et al (1987).''

I mean, that's just describing the normal operation of the elasticity of demand. To refer to a property that will apply to almost any normal commodity by noting that it is counter to a small group of commodities that behave strangely seems perverse in the extreme. Ordinary Person 01:24, 7 June 2007 (UTC)


 * I think the effect being referred to is the "conspicuous thrift" effect. This is not the normal preference for a cheaper good because it will cost you less money; it is the preference for a cheaper good because being seen to use it will increase your reputation (as a thrifty person, or as a faithful member of your social class). For instance, if there were two goods which for your purposes had equal quality, and one was well-known to be cheaper, and you were offered either one for free, which one would you pick? Since both are free, the only effects in this case are Veblen and counter-Veblen. Homunq (talk) 17:10, 13 October 2008 (UTC)

New Neuropsych study
But not sure whether to add as appropriate reference. Here is the "raw" link:

http://economics.uoregon.edu/seminars/papers/2009-04-10_Capra.pdf

"Neural Mechanisms of Social Influence in Consumer Decisions," by Gregory Berns, C. Monica Capra, Sara Moore, and Charles Noussair.

The study may be unique in that the data is sourced physiologically, as opposed to only behaviorally. In any case Veblen's theory of conspicuous/invidious/emulative consumption is broader than the simple term "Veblen Good" and its dictionary definition would imply. There was an implicit general theory of intrinsic valuation that was contained in his economics that, as is well-known, was difficult to infer by nature of his writing. It might certainly be beyond the scope of merely the "Veblen Good" wiki page to expand on that, but the fact that Veblen recognized such exchanges as the naturally-occurring counterexamples to the simplifying assumptions we still find underlying today's most well-accepted general theories (e.g. rational expectations, marginal utility, capital aggregation, equilibrium) makes the "Veblen Good" more than just a peculiar footnote from an eccentric American economist. Veblen is often dismissed as merely another sociologist but recent events in credit markets should remind us that modern finance and macroeconomic theory 100 years later is still no different. Neurological evidence is surely controversial but in terms of helping economic policy decisions become scientific as opposed to merely logical - as was Veblen's broad intent - one can hardly imagine a more pertinent exhibit...? —Preceding unsigned comment added by 75.73.190.241 (talk) 20:47, 11 April 2009 (UTC)

Introduction
The first sentence: "In economics, Veblen goods are a theoretical group of commodities for which peoples' preference for buying them increases as a direct function of their price, instead of decreasing according to the law of demand." is wrong. The fundamental property of Veblen goods is that utility is a function not only of their quantity but also of their price (an increasing function of their price). This does not mean that the actual demand will respond positively to price, if the good is not Giffen and the Veblen effect is small. Besides, the law of demand does not say that preference for buying a good decreases when its price increases, but that the quantity demanded decreases; there's no direct effect of prices on utility. Two different things (whether the utility function depends on prices and how demand depends on prices) are mixed up. 201.253.251.78 (talk) 18:13, 6 July 2009 (UTC)

Agency-passthroughs (i.e FNMA 5%)
Can someone add a wikilink and an aside so this makes sense? FNMA links to Fannie Mae. Why is "Agency" capitalized?

Mortgage backed securities, more specifically Agency-passthroughs (i.e FNMA 5%) exhibit many of the same characteristics of Veblen goods.

Pirate Argh!!1! 10:50, 22 November 2009 (UTC)

Related concepts section
I don't know why the bottle of champagne is pictured here. I presume it is intended to be an example of either a Veblen good or one of the other concepts described in this section. However, I feel the caption is inadequate to explain which.

I don't know enough about this good to improve the caption myself, and deliberately I have not looked up the article to attempt to discover why (although actually the links are to the maker and to the type of champagne so I am not sure I would find out anyway). I imagine it is expensive; but that of itself is not illustrative of anything in the text (or if it is, it does not say which or why).

I'd hope someone with better knowledge than I could improve the caption, or, in the alternate, remove the picture.

Best wishes Si Trew (talk) 19:09, 11 April 2010 (UTC)