The snob effect is a phenomenon which is described in microeconomics as a situation where the demand for a certain commodity by individuals of a higher income level is inversely related to its demand by those of a lower income level. The "snob effect" is different from most other microeconomic models, in that the demand curve has a positive slope, rather than the typical negatively sloped demand curve of normal commodities . This situation is derived by the desire to own unusual, expensive or unique commodities.. For consumers who want to use supreme products, price is quality. These commodities usually have a high economic value, but low practical value. The lesser an item available, the higher is its snob value. Examples of such items with general snob value are rare works of art, designer clothes, and sports car.
In all these cases, one can debate whether they meet the snob value criterion, which in itself may differ from person to person. A person may reasonably claim to purchase a designer garment because of a particular threading technique, longevity, and fabric. While this is true in some cases, the desired effect can often be achieved just by purchasing a less-expensive version from any brand. Often these high-end expensive items end up as closeout items in discount stores or online retailers where they may be sold at deep discounts from original price, bringing into question the true value of the product. Ultimately, wealthy consumers can be lured by external factors such as rarity, celebrity representation and brand prestige.
Collectors within a specific field can suffer from snob effect, searching for the rarest and often most expensive collectibles. Such examples are classic automobiles, stamps and coins
The above graph represents The Snob Effect
Comentários