Blacks and Hispanic spend more on "show-off" items than whites

[Oleander Ardens]

A nice study. Fits perfectly with my observations.

Abstract

This paper documents racial differences in visible consumption – clothing, jewelry and cars. We
find that Blacks and Hispanics devote larger shares of their expenditure bundles to these items
than do comparable Whites. We show that these differences exist among virtually all sub-
populations, that they are relatively constant over time, and that they are economically large. We
present a model of “conspicuous consumption” in which visible goods serve as a signal of
individual’s unobserved income and, consequently, social status. In the model, the status payoff
is proportional to relative income, so at a given level of income status is more important for
individuals where their reference group is poorer. The fraction of income spent on conspicuous
goods is therefore increasing in households’ own income, but decreasing in their peer-group’s
average income. We test this prediction using cross-state variation in average incomes for
different race groups. Within the White population, visible consumption shares increase in own
family income and decline in the mean income of individuals of the same race within a state. The
same is true for Blacks and Hispanics. We then demonstrate that controlling for the average
income of the reference social group eliminates most of the conspicuous consumption differences
across races: Blacks spend more on visible goods because their local communities are on average
poorer than those of similar Whites. We conclude with an assessment of the role of conspicuous
consumption in explaining observed lower spending by racial minorities on items likes health and
education, and on lower rates of wealth accumulation for racial minorities.

Source

[PanzerJaeger]

Bling bling yo...

[Spino]

I really hate how these studies take a monochromatic and/or white vs. everyone else view of the world. How convenient that this study excluded Asians...

13 Our focus has been analyzing difference in spending patterns between Blacks, Hispanics, and Whites. We also explored differences in spending patterns between Asians and Whites. Asians, on average, spend 10 percent less on visible goods than Whites with similar permanent income and demographics. Given the large amount of heterogeneity within the Asian population, we excluded them from our tests of conspicuous consumption discussed in the following sections. However, given that mean Asian income is slightly higher than mean White income, our theory outlined in Section 4 would predict less conspicuous consumption among Asians relative to Whites, all else equal.

Because a report that has Asians at one end of the spectrum with Blacks at the other is just too terrible to imagine...

Ok, I'm a bad boy for not wading through all 72 pages of this study but I'm having trouble with this statement... "Given the large amount of heterogeneity within the Asian population..."?!? Why would the Asian population be any more hetergenous that whites? When you consider that the term 'Asian' is as broad and generalized as 'white' in the US and implies a number of distinct ethnicities (Chinese, Japanese, Koreans, Vietnamese, Thai, Malaysians, etc.) it is difficult for me to accept the notion that they are much more heterogenous than Europeans.

Call me nutty but this study in conspicuous consumption seems to parallel the findings of the Bell Curve and other controversial texts, studies & tests that are notorious for driving environmental determinists into a raving, bloodthirsty mob. Asians = highest mean IQ = least conspicuous consumers... Blacks = lowest mean IQ = most conspicuous consumers. And... that's all I'm going to say on the matter... Let someone else stir up the hornets' nest and mention the elephant standing in the corner...

[Moros]

Wow anyone bothered to write 72 pages on this stuff? All this while there are so many interesting stuff that almost hasn't been done research and written on.
People do the strangest things when they're bored...

[Ironside]

Call me nutty but this study in conspicuous consumption seems to parallel the findings of the Bell Curve and other controversial texts, studies & tests that are notorious for driving environmental determinists into a raving, bloodthirsty mob. Asians = highest mean IQ = least conspicuous consumers... Blacks = lowest mean IQ = most conspicuous consumers. And... that's all I'm going to say on the matter... Let someone else stir up the hornets' nest and mention the elephant standing in the corner...

So, logically all of the nobillity and rich bourgeois a few houndred years ago were stupid and the richer they were, the more prone they were to be stupid?

Or it might be that some sub-cultures are more prone to give status by appearing rich than actually being rich.

[Spino]

So, logically all of the nobillity and rich bourgeois a few houndred years ago were stupid and the richer they were, the more prone they were to be stupid?

Or it might be that some sub-cultures are more prone to give status by appearing rich than actually being rich.

Well considering there was very little in the way of meritocracy or IQ testing back then it's hard to know what the exact level of intelligence was for the aristocratic blue bloods & bourgeois was. Given that the bourgeois actually had to carve out a living from modest beginnings chances are they were higher than your average blueblood on the IQ scale. Based on the behavior of many European monarchs it's clear that brains and royal bloodlines were not mutually inclusive. Furthermore the lower & middle classes had very little disposable income back then, not to mention that there were ZERO social safety nets such as unemployment or welfare. Even the not-so-bright were smart enough to realize that dropping some coin on some sparkling, shiny frivolities meant you might not be able to feed yourself or your family for a few days. Let me also remind you that loans were much, much harder to secure back then (and more hazardous to your health when you missed payments) and the idea of 'credit' or credit cards had not been invented yet. Basically living irresponsibly is far less risky for people on the lower end of the IQ curve now than it was prior to the 20th century.

Yeah.... No smart and successful guy ever buys a big house, a flashy car or a bunch of jewelry for his trophy wife....

That never happens.

Gosh, you're right, that never happens! This study doesn't deal with individual examples , were that the case everyone could cite an example disproving the findings. We're dealing with means and averages here. Take a good hard look at those dimwits who win the lottery or professional athletes & musicians whose only genetic talents begin and end with their vocation. Piles and piles of money wasted on shiny baubles, frivolities, houses, cars, whores, drugs, etc. The smart ones know the gravy train won't last forever and temper their spending habits with moderation. Funny how it's always the smart ones that find themselves living comfortable years after their time in the limelight is over. Compare and contrast George Foreman (fairly intelligent) to Evander Holyfield (outright dumbass). The former has a large family, large estate, etc. and thanks to being smart about how he lends his name out is set for several lifetimes. Foreman always dresses casually or respectably and his home, while spacious & distinctly mansion-like, does not look like Caligula's playhouse. Holyfield however had a reputation for dressing like a pimped clown, was always bedecked in gaudy jewelry, bought an oversized house that was garishly decorated... everything to the extreme and, surprise surprise... he is about to file for bankruptcy.

[seireikhaan]

Gosh, you're right, that never happens! This study doesn't deal with individual examples , were that the case everyone could cite an example disproving the findings. We're dealing with means and averages here. Take a good hard look at those dimwits who win the lottery or professional athletes & musicians whose only genetic talents begin and end with their vocation. Piles and piles of money wasted on shiny baubles, frivolities, houses, cars, whores, drugs, etc. The smart ones know the gravy train won't last forever and temper their spending habits with moderation. Funny how it's always the smart ones that find themselves living comfortable years after their time in the limelight is over. Compare and contrast George Foreman (fairly intelligent) to Evander Holyfield (outright dumbass). The former has a large family, large estate, etc. and thanks to being smart about how he lends his name out is set for several lifetimes. Foreman always dresses casually or respectably and his home, while spacious & distinctly mansion-like, does not look like Caligula's playhouse. Holyfield however had a reputation for dressing like a pimped clown, was always bedecked in gaudy jewelry, bought an oversized house that was garishly decorated... everything to the extreme and, surprise surprise... he is about to file for bankruptcy.

Well, lets not forget that boxers have seem to have a considerably higher propensity to turn out like Holyfield, as opposed to Foreman. Not sure if its just too many blows to the head during their career, or the fact that it doesn't exactly take the most intelligent person anyways to be a really good boxer, or whatever, but boxers, 90% of the time, just don't seem to have any kind of longevity.

[HoreTore]

Gosh, you're right, that never happens! This study doesn't deal with individual examples , were that the case everyone could cite an example disproving the findings. We're dealing with means and averages here. Take a good hard look at those dimwits who win the lottery or professional athletes & musicians whose only genetic talents begin and end with their vocation. Piles and piles of money wasted on shiny baubles, frivolities, houses, cars, whores, drugs, etc. The smart ones know the gravy train won't last forever and temper their spending habits with moderation. Funny how it's always the smart ones that find themselves living comfortable years after their time in the limelight is over. Compare and contrast George Foreman (fairly intelligent) to Evander Holyfield (outright dumbass). The former has a large family, large estate, etc. and thanks to being smart about how he lends his name out is set for several lifetimes. Foreman always dresses casually or respectably and his home, while spacious & distinctly mansion-like, does not look like Caligula's playhouse. Holyfield however had a reputation for dressing like a pimped clown, was always bedecked in gaudy jewelry, bought an oversized house that was garishly decorated... everything to the extreme and, surprise surprise... he is about to file for bankruptcy.

So only shiny stuff count as status items...?

A clean style doesn't show status at all? But people spend money on drugs to increase their status? Hmmm....

[HoreTore]

Call me nutty but this study in conspicuous consumption seems to parallel the findings of the Bell Curve and other controversial texts, studies & tests that are notorious for driving environmental determinists into a raving, bloodthirsty mob. Asians = highest mean IQ = least conspicuous consumers... Blacks = lowest mean IQ = most conspicuous consumers. And... that's all I'm going to say on the matter... Let someone else stir up the hornets' nest and mention the elephant standing in the corner...

Yeah.... No smart and successful guy ever buys a big house, a flashy car or a bunch of jewelry for his trophy wife....

That never happens.

[Viking]

A nice study. Fits perfectly with my observations.



Source

In a country with racial subcultures it does not carry much weight.

[HoreTore]

A study that says "Whites", "Blacks" and so on is a study I ignore completely.

[Viking]

A study that says "Whites", "Blacks" and so on is a study I ignore completely.

Now then..

[HoreTore]

Also, what item cannot be classed as a status item?

What can you spend money on that can't be linked to status?

[Husar]

What can you spend money on that can't be linked to status?

Gouda.

[Incongruous]

Or could it be that, those who are less well off tend to overdress themselves with crap than those of us better off?
Since the majority of both minorities are in the poorer section of society might they seem to connect more along ethnic lines than say, poor whites?
Over here poor "whites" (what the hell is that anyway? It's not an ethnicity since we do not all share common culture), buy all sorts of flashy crap.

Why was this study even conducted?

A better one would ahve been, which societies smoke the best cigars and drink the finest of whiskeys...

[KarlXII]

So compared to whites, blacks and Hispanics tend to buy more material possessions. And?

How does this "fit your observation"? That minorities are more interested in cars and jewelery than anything else? In Southern California, you'd find it's the other way around.

The feeling you get rolling up in front of your third baby mama' trailer to pick up your seventh bastard child bumping the latest 3-6: Racist

Fixed.