Thorstein Veblen coined the term "conspicuous consumption" to describe spending on luxury goods to publicly display wealth and status. The birth of Prince George has increased conspicuous consumption of expensive baby items as mothers emulate the royal family. Veblen argued that people feel pressure to match the consumption standards of higher social classes. While Veblen was critical of conspicuous consumption, the economic boost from royal-inspired baby product spending suggests it shouldn't be entirely scorned.

1. Ruth Tarrant Head of Economics and Politics, Bedales School
October 2013
What would Thorstein Veblen say?
The hyped-up birth of the new Royal baby,
Prince George, has brought the fashionista
mums and mums-to-be out in force as they
try to emulate the clothes and accessories
accompanying the nation’s favourite baby
and his trend-setting mother. According to a
recent study by babycentre.com UK’s branch,
just under half of all new mothers said they
had bought more luxury items for their
babies than themselves, and that on average,
one third of parents had already spent over
£6000 on their little bundles before they
were 6 months old.
Thorstein Veblen (1857 – 1949) is the economist
credited with the concept of conspicuous
consumption – this is the spending of money on
luxury goods to publicly display a high social and
economic status. At the ‘top end’ of the conspicuous
consumption scale, goods are bought with the
intention of provoking envy amongst others,
so-called invidious consumption. Veblen’s work
has been developed more recently by the new breed
of behavioural economists, such as Dan Ariely.
Veblen is most well known to students of A-level
economics as being the economist responsible for
the term Veblen good, which is a good for which
demand increases when its price increases. This
contradicts the usual view of demand, where quantity
demanded is inversely related to price.
Looking more closely at the baby items bought
for Prince George, he has a Blue Almonds moses
basket for £295 and a Bugaboo pushchair for just
under £1000. Stella McCartney sells baby bomber
jackets for £60, potties can be found on Amazon
for £35, and Harper Beckham had £2000 worth of
shoes before she turned 1 (including a pair of £112
Hermes lambskin booties). Victoria Beckham chose

2. Ruth Tarrant Head of Economics and Politics, Bedales School
an iCandy pram for baby Harper causing sales of the
pram to rocket from £3.6m in 2009 to £9.6m in just
a few months after her birth. Despite a significant
slowdown in the UK economy over recent years, the
luxury baby market has grown rapidly, from sales of
£6.3bn in 2010 to over £7bn by early 2014. This
suggests that such items might actually be inferior
goods, which might seem a little bizarre, until we
consider Veblen’s original work on conspicuous
consumption in The Theory of the Leisure Class
(1899):
In modern civilized communities... the members
of each stratum accept as their ideal of decency
the scheme of life in vogue in the next higher
stratum.
It frequently happens that an element of the
standard of living which set out with being
primarily wasteful, ends with becoming, in the
apprehension of the consumer, a necessary of
life
And
Conspicuous consumption of valuable goods is
a means of reputability
Veblen was, on the whole, rather scathing of
conspicuous consumption and chose to live his life
in a rather disheveled, grubby state. However, with
the boost to retail spending as a result of Prince
George’s arrival estimated at £243m, with a multiplier
effect to add in, perhaps we shouldn’t be too scornful
of those mums who absolutely have to have the Blue
Almond moses basket, or at least the £35 version
from Asda.
Sources
www.bbc.co.uk/news/business-23182280
www.retailresearch.org/royalbaby2013.php