Consuming beyond means: Debt trap of conspicuous consumption in an emerging economy
(2021). Journal of Marketing Theory and Practice, 29(2), 233–249.
Cited 30 times · OpenAlex, 2026-11-07
In short
Households in low-income economies often use debt to pay for showy consumption. Using nationally representative panel data from India, the paper finds that more conspicuous spending leads to more household debt and more loans, with a bigger effect in rural households and a smaller effect where education is higher. This is a warning for lenders and policymakers about spending that is driven by status.
Abstract
With high prevalence of conspicuous consumption in low-income emerging economies like India, we argue that households in these economies resort to debts to finance their conspicuous consumption. Using nationally representative household panel data from Indian Human Development Surveys, we provide evidence that an increase in conspicuous consumption results in higher household debt and more number of loans, using multiple empirical strategies. We further illustrate that this effect on household debt i) is higher for rural households, and ii) reduces with higher education. We contribute to the literature on conspicuous consumption and its unfavorable consequences in emerging economies.
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