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...

[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.

[HoreTore]

Gouda.

Tell me what you eat, and I will tell you what you are

[King Henry V]

Seems to me to be a revenue-based equivalent of the Veblen effect: the demand for a good which is considered a status-symbol increases with its price, or in this case the demand increases the lower ones revenue is. Blacks and Hispanics have a lower incomes, hence the increased portion of their revenue being spent on such status symbols.

[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...

[Evil_Maniac From Mars]

Tell me what you eat, and I will tell you what you are

Husar is Dutch?

[Devastatin Dave]

And in other news...
Whites can't jump or dance and stole Rock and Roll from the bruthas.

[Craterus]

http://es.youtube.com/watch?v=RmrjX6NL0u8

[Reverend Joe]

And in other news...
Whites can't jump or dance and stole Rock and Roll from the bruthas.

Seriously, though, why was this study not done on purely socioeconomic lines? Then you might have something vaguely interesting. Breaking it down along racial barriers is just misleading and subtly (*gasp* darest I say it?) racist.

Besides, as Viking mentioned, there's also the racial subcultures to consider. Not that all blacks, hispanics or whites can be placed in one subculture, but there is definitely a strong subculture among poor and/or minority populations that encourages such consumption. Now, I won't get into how this was created, lest I be accused of being a pinko hippie liberal douche who is ragging on my fellow white man and/or ever-glorious consumerist capitalism, but let's just say that we would all be better off without these subcultures.

[Reverend Joe]

http://es.youtube.com/watch?v=RmrjX6NL0u8

Myah... Richard Pryor was a lot funnier. I wish he was around to talk about that stuff.

[Devastatin Dave]

Seriously, though, why was this study not done on purely socioeconomic lines? Then you might have something vaguely interesting. Breaking it down along racial barriers is just misleading and subtly (*gasp* darest I say it?) racist.

Besides, as Viking mentioned, there's also the racial subcultures to consider. Not that all blacks, hispanics or whites can be placed in one subculture, but there is definitely a strong subculture among poor and/or minority populations that encourages such consumption. Now, I won't get into how this was created, lest I be accused of being a pinko hippie liberal douche who is ragging on my fellow white man and/or ever-glorious consumerist capitalism, but let's just say that we would all be better off without these subcultures.

All I know is the most ghetto fabulous people I've ever seen were affluent white teens wanting to have street crede. Dats all, peace out. That study be whack yo, word to yo mutha bitches...

Watch a week of MTV Cribs and look at the audience its targeted to. Its not targeted to poor blacks trying to kepp it real, its targeted to dumbass crackers wanting to see how to represent. Makes me wanna bust a cap wit a quickness.

[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.

[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.

[Ronin]

All I know is the most ghetto fabulous people I've ever seen were affluent white teens wanting to have street crede. Dats all, peace out. That study be whack yo, word to yo mutha bitches...

Watch a week of MTV Cribs and look at the audience its targeted to. Its not targeted to poor blacks trying to kepp it real, its targeted to dumbass crackers wanting to see how to represent. Makes me wanna bust a cap wit a quickness.

will the real vanilla ice please stand up

[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....

[Spino]

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....

Forgive my use of the word 'shiny' but I am treating it a being interchangeable with conspicuous...

con·spic·u·ous (kn-spky-s)
adj.
1. Easy to notice; obvious.
2. Attracting attention, as by being unusual or remarkable; noticeable. See Synonyms at noticeable.

A clean style does show status but a Mercedez Benz in and of itself does not look more conspicuous or expensive than say a luxury car tens of thousands of dollars cheaper. It's the knowledge that it is a Mercedez Benz is what calls to attention the status of the owner. However putting custom rims with garish designs on the wheels of said Benz along with a license plate that says 'PLAYA4U' or... putting said rims & license plate along with fake spoilers on an economy box or low priced sports car is a surefire sign that the owner is looking to attract even more attention to him/herself than is normal. But it's not the appearance of status that is being called into question here, it is what lengths certain racial groups will go to signal to their peers and the world that they are 'a cut above the rest'.

A clean style as compared to a shiny style where good taste is thrown out the window in favor of making a loud statement. A perfect example would be a wealthy person who decides to get a fancy marble statue and fountain for one's sprawling and meticulously landscaped estate. Clean = fancy white marble statue & fountain. Shiny = fancy white marble statue & fountain... covered in gold leaf, encrusted with jewels and adorned with rose petals every morning by some landscaper whose official title, per the landowner, is "Morning Glory Miguel"...

All you need to do is check out some episodes of MTV's Cribs on Youtube to see what I'm talking about.

And yes, drugs can also be used to indicate status... it simply depends on what drug you're talking about. Obviously some are more expensive than others and the more expensive ones typically offer a better & more prolonged high.

And again, to quote the paragraph at the beginning of the thread...

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.

Buying a big house, expensive car & nice clothes doesn't neccessarily make one a conspicuous consumer. It's how big of a chunk these items take out of your overall wealth and to what extreme you're willing to go to 'advertise' your wealth is what the report is all about.

[HoreTore]

I'll state it again; there is nothing in the world you can spend money on that does not increase your status.

If the study said it was about "things we(as in the "scientists") think are stupid", I wouldn't have a problem. But as it doesn't say that, I can safely ignore it and think bad thoughts about said "scientists"....

[Devastatin Dave]

I'll state it again; there is nothing in the world you can spend money on that does not increase your status.

What about my penis enlargment...

[yesdachi]

There is a house down the road from mine that never has its lawn mowed and doesn’t have air conditioning but the dad/owner drives a custom painted Lincoln Navigator, wares at least $300 dollars worth of clothes and another god knows how much on bling and electronics. Would you like to guess his ethnicity?

The study has some creditability but every stereotype has someone to point at.

[ajaxfetish]

I'll state it again; there is nothing in the world you can spend money on that does not increase your status.

If the study said it was about "things we(as in the "scientists") think are stupid", I wouldn't have a problem. But as it doesn't say that, I can safely ignore it and think bad thoughts about said "scientists"....

I'm not sure what to think of the study, but you're still missing its point, HoreTore. It's not about status. No really, it's not. It's about making status conspicuous. It has nothing to do with subtle status symbols, only in-your-face ones.

Ajax

[HoreTore]

I'm not sure what to think of the study, but you're still missing its point, HoreTore. It's not about status. No really, it's not. It's about making status conspicuous. It has nothing to do with subtle status symbols, only in-your-face ones.

....and the scientific value of that, is...?