Effects of income inequality in an emerging economy on subjective economic well-being: Suppressing effect of conspicuous consumption
(2025). Journal of Marketing Theory and Practice, 34(4), 842–860.
Cited 1 times · OpenAlex, 2026-11-07
What the paper shows
In short
Using data on 34,621 Indian households, the study finds that as income inequality rises, households spend more on showy goods and feel less well off. Showy spending then gives a false sense of well-being while pulling money away from productive investment. Advertisers should be careful about how they market in unequal regions, and policymakers can help by educating consumers about their choices.
Abstract
This article examines how rising income inequality affects households’ perceptions of economic well-being and consumption decisions. Using data of 34,621 households from India Human Development Survey (2004 and 2011), the authors find that increasing income inequality in emerging economies increases conspicuous consumption and lowers households’ self-perceptions of economic well-being. Households overcome negative effects of income inequality on perceived economic well-being by consuming conspicuous goods, resulting in a false sense of economic well-being. Given this increased conspicuous consumption diverts spending from productive investments, firms should adopt responsible advertising practices in high-income inequality regions. Policymakers can educate consumers about informed consumption choices.
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