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The “Snob Effect”, lower income and high shopping expenses

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Snob Effect: Odd shopping habit of low- and middle-income families

Snob effect is economical effect that influence people who belong to low and middle income groups.

Snob effect is one of the factors that John Maynard Keynes indicates while talking about factors that influence consumers’ likes and preferences.
Keynes put forward the idea that individuals who are claimed to be rational or homo economicus by the classical economy aren’t rational at all. Keynes, claiming that consumers can’t decide in a rational manner, introduced the snob effect as one of the factors that influence consumers’ preferences and likes.

Snob effect shows that consumers may not spend money in relation with their own income level and try to be similar to people who are in higher positions and consequently spend more than they earn.

snob effect: low income and high shopping expenses

Snob effect is an economical-behavioral effect that people with middle income are subjected. In short, snob effect is the tendency to change status unconsciously done by individuals with middle income. Namely, beginning of marginalization or effort to look like snob.

Let’s take a civil-servant, someone white collar and has middle income. The person involves with an irrational behavior and shops from Zara which is a brand that sells products much more expensive than s/he earns based on the observation that people who earn similar amount shop from lower brands. Consequently, the person behaves different than own status-like people. This leads companies to update their pricing in a more prestigious way in accordance with individuals’ behaviors. So, this effect is based both in economy and psychology.

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