A college education as another object of conspicuous consumption?

A law professor argues the price of a college degree is related to seeing it as part of conspicuous consumption:

More than a century ago, the sociologist Thorstein Veblen coined the term “conspicuous consumption” to describe the practice of buying luxury goods in order to display social status. In its purest form, conspicuous consumption involves purchasing expensive goods precisely because they are expensive, which means that the true conspicuous consumer will have what economists call an inverted demand curve.

Normally, when the price of a good rises, demand for it will fall. Demand for a Veblen good, by contrast, goes up as it becomes more expensive. The purpose of buying it is to display wealth, so the fewer people that can afford to buy a good, the more valuable it becomes to conspicuous consumers…

In economic terms, higher education is a positional good: It is valuable to have a college degree because other people don’t have one. It is also to a significant extent a Veblen good: Sending one’s children to college, and most especially a prestigious (meaning expensive) college, is a way of signaling social status via the conspicuous consumption of a luxury good.

All of this helps explain why college tuition has increased three times faster than the cost of living over the past three decades. University administrators have discovered that, to a remarkable degree, the more they charge for what they’re offering, the more people will want to buy it.

This reminds me of the argument Mitchell Stevens makes in Creating a Class. After a prolonged study of college admissions, Stevens suggests prospective college students tend to select the school they will attend primarily based on status (my note: which is often tied to price). The emphasis is not on learning but rather on the economic benefits this can lead to (better jobs, better social networks) as well as the status the college confers to its graduates.

I encountered a bit of this with my graduate education at the University of Notre Dame. While Notre Dame does not have one of the highest ranked sociology programs, people who heard I was at Notre Dame expressed they were impressed since it is viewed as a good school. The implication was that I must be a good student if Notre Dame thought highly of me – a transfer of status from the university to the individual. However, I suspect their claims were based on the undergraduate ranking (usually between #15-20 in US News) and not on the specific of the sociology graduate program.

Americans want the “New Old House,” an older-looking home with McMansion amenities

The Wall Street Journal describes the trend of architects and builders putting together homes that look old and have character but have all the latest features:

“The first words that come out my clients’ mouths are, ‘We’d love to have a real old house. We just can’t find one,’ ” said architect Russell Versaci, who runs a Middleburg, Va.-based practice. “And the second thing they say is, ‘We are so sick of McMansions. We just want to get out and get back to reality.’ ”

What architects like Mr. Versaci—along with certain discriminating prefab builders and house-plan companies—offer instead is known as the New Old House: a sanely proportioned residence that’s historically accurate on the outside, but conceived for the needs of modern Americans on the inside. Austere Greek Revival farmhouses with roomy island kitchens. Time-travelesque Craftsman bungalows with startlingly open floor plans. Walk-in closets designed to hold more than a few Civil War-era muslin petticoats…

The exhibition is timely. According to Amy Albert, editor of Custom Home—a Washington, D.C.-based magazine that caters to architects, designers and high-end builders—a hankering for authentic traditional residential design is one of 2014’s big trends. That said, “People aren’t seeking exact replicas of historical houses,” she added. “They want architectural purity in the elevations and the details, but inside they want connectivity and open floor plans.” Discerning homeowners, she said, are demanding that custom builders bone up: “Mixing a Palladian window with a Craftsman column is not going to cut it. Even if people don’t have the vocabulary to articulate why it’s wrong, they instinctually know it is.”…

Both Mr. Versaci and Mr. Schafer acknowledged there’s something potentially inauthentic about recreating oldness, especially if you go to the extent of simulating patinas on stone (using coffee) or, as Mr. Schafer mentioned, importing $50,000 mature beech trees so your New Old House’s landscaping doesn’t look too new. “Making a mirage is an issue,” said Mr. Versaci. “My personal preference is to let a house age through natural processes. If you choose quality, natural materials like unlacquered brass, they will eventually age. But some 21st-century Americans, who are used to ‘add water and serve,’ just don’t want to wait.”

One of the more interesting parts of the new second edition of A Field Guide to American Houses is the last section on newer houses, dubbed Millennial Mansions, which discusses the differences between an authentic looking older home and a fake looking older home. For example, a new home in a Craftsman style might not have the correctly proportioned pillars on the porch or might be built on a slab when such older homes in this style usually had a basement.

Yet, the problem with historicity is not just about recreating the past. There is also an odd lack of interest in a historic interior as it is all about the exterior. If anything, this just reinforces the same mindset these people criticize about McMansions: it is all about making an impression with the exterior and then having a flashy interior. Would the people who complain McMansions don’t provide a good psychological fit make the same complaint about these new old houses?

Also, are these New Old Houses much smaller than the average McMansion?

Get rid of the bedroom and add a fancy Murphy bed

All the new micro-apartments would benefit from sleek and comfortable Murphy beds:

And a growing number of these projects are installing upscale wall beds that turn back into a sofa (or a dining table, or a desk, or a bookshelf, or a wall-storage unit) by day, giving the small-space dweller the equivalent of a secret room. The design leader of cleverly engineered, high-end, top quality transformable furniture is Clei, the family-owned, Brianza, Italy–based company that celebrated its 50th anniversary last year and is available in the U.S. via Resource Furniture…

“The Murphy bed is a key part of the design,” Hill said. “But there are so many that are cheesy and low-quality, and look like crap. We’re trying to create something really compelling and sophisticated, that doesn’t feel like you’re sacrificing anything. These don’t feel gimmicky or cheap but like a great bed, and a great piece of machinery.”…

Clei beds are the closest thing I have ever seen to furniture performance art. Thanks to sophisticated engineering, they can be opened and closed in seconds with almost no effort, a huge part of their appeal…

The beds are made from quality materials and offer ultra-sleek contemporary Italian design. Much of the hardware is hidden and the units housing beds are only 12 inches deep. One detail they are working on is finding a way to hide the buckled straps that hold the mattress in place while the bed is being opened and stowed.

And the end of the article starts an interesting discussion about whether bedrooms are necessary. Of course, when space is very limited, furniture that is movable or that can serve multiple uses is very helpful. Some of these micro-apartments are very clever about storage, fold-down furniture, and even moving walls.

One feature not mentioned about the high-end Murphy bed: is it comfortable? Can you get a good night’s sleep? It may not matter if the bet design is here if the bed isn’t comfortable…

Another thought about micro-apartments: while they can be good for providing affordable housing and also encouraging people to live with less, could they fall prey to becoming status symbols all about the latest design? Given the price of some of the features needed to live comfortably with only a few hundred square feet, it may not be too cheap to have a comfortable apartment with only a few hundred square feet. For example, the IKEA store models of small apartments don’t have terribly expensive things but they aren’t necessarily trying to be trendy.

Mapping wealth by locating iPhone, Android, and Blackberry owners

Check out the maps of cell phone owners in Washington, D.C., New York, Chicago, and a number of other major American cities:

Among other things, cell phone brands say something about socio-economics – it takes a lot of money to buy a new iPhone 5 (and even more money to keep up with the latest models that come out faster than plan upgrades do). Consider, then, this map of Washington, D.C., which uses geolocated tweets, and the cell phone metadata attached to them, to illustrate who in town is using iPhones (red dots) and who’s using Androids (green dots)…

That picture comes from a new series of navigable maps visualizing some three billion global, geotagged tweets sent since September of 2011, developed by Gnip, MapBox and dataviz guru Eric Fischer. They’ve converted all of that data from the Twitter firehose (this is just a small fraction of all tweets, most of which have no geolocation data) into a series of maps illustrating worldwide patterns in language and device use, as well as between people who appear to be tourists and locals in any given city.

The locals and tourists map scales up a beautiful earlier project from Fischer. You could kill a few hours playing with all of these tools, built on the same dataset. But we particularly liked looking at the geography of smart phone devices. As in Washington, above, iPhones are often more prominent in upper-income parts of cities (and central business districts), while Androids appear to be the dominant device in lower-income areas.

It sounds like there could be some methodological issues here. The data doesn’t cover all Twitter users and then Twitter users are already a small subset of the US population. Nonetheless, these are interesting maps. I saw recently that over 50% of Americans now have smartphones – it jumped from 35% to 56% in several years. But, not all cell phones cost the same or aim for the same markets. iPhones aren’t just expensive. They also have a certain aesthetic and set of features that appeals to a certain set of Americans. Samsung had a set of recent commercials that played off the cool factor of iPhones, raising the idea of the phone as (expired?) status symbol. If you asked smartphone owners why they chose the phone they did, how many would admit that the status of the phone significantly factored into their decision?

More broadly, it would be interesting to think about what other common consumer goods could be mapped in ways that show clear patterns.

Study finds cell phone usage linked to addiction, materialism, and impulsiveness

A new study in the Journal of Behavior Addictions argues cell phone usage can be linked to other concerns:

“Cell phones are a part of our consumer culture,” said study author James Roberts, Ph.D., professor of marketing at Baylor’s Hankamer School of Business. “They are not just a consumer tool, but are used as a status symbol.”…

Roberts’ study, co-authored with Stephen Pirog III, Ph.D., at Seton Hall University, found that materialism and impulsiveness are what drive cell phone addiction.

Cell phones are used as part of the conspicuous consumption ritual and also act as a pacifier for the impulsive tendencies of the user, according to Roberts. Impulsiveness, he noted, plays an important role in both behavioral and substance addictions…

Some studies have shown that young adults send an average of 109.5 text messages a day or approximately 3,200 texts each month. Furthermore, surveys suggest that young adults receive an additional 113 text messages and check their cell 60 times in a typical day…

Data for this study come from self-report surveys of 191 business students at two U.S. universities. Cell phones are used by approximately 90 percent of college students, and said Roberts, “serve more than just a utilitarian purpose.”

New technologies tend to have the potential to allow us to do new things in new ways, often working alongside a narrative of progress, but we need to continually ask whether the use of new technologies can also lead to negative outcomes. We don’t have to be Luddites to suggest that we should evaluate the social changes that accompany technological change.

One question about addiction and mass culture: if a majority or large number of people have more addictive relationships with their cell phones, does it at some point then cease to be addiction and comes to be seen as “normal”?

Question from Real Housewives: is getting evicted from a McMansion worse than living in one?

From the Real Housewives of Atlanta comes this intriguing question: is getting evicted from a McMansion worse than living one in the first place?

There have been plenty of things said about Kim Zolciak’s sudden move from her “dream home” (which she was actually renting from Kendra and Antonio Davis), but she want’s everyone to get one thing straight: her family was not evicted from the McMansion.

In one of her last BravoTV.com blogs of her career on The Real Housewives of Atlanta, Kim drives that point home yet again. “We were not EVICTED! We ALWAYS paid our rent. Our lease was up; it’s that simple,” she declares.

And in a direct response to what some of the other Housewives have been saying about Kim’s housing situation, she writes, “Yes, Kandi, NeNe, and Cynthia, it was once my ‘dream home’ and my credit has NOTHING to do with me moving. I’m blessed to have never had trouble financially unlike some of the other girls, but they can make whatever comments they’d like.”

McMansions are often thought of as status symbols: their owners want to show they have plenty of money and can afford a large house. Some critics of McMansions have argued that the purchase of such homes is all about new money and displaying status. The architecture of the McMansion tends to feed into this as they have imposing entryways and fronts with less attention paid to other parts of the house.

But, getting evicted from such a house suggests the owners can’t afford this lifestyle. In a country that tends to promote homeownership, getting evicted for financial reasons is usually not a happy topic for people but it could be even worse for people who have lived for years with the appearance that money is no problem. From what I’ve read about the various Real Housewives shows, their participants tend to fall in this group: spending money to keep up appearances matters so not being able to “keep up with the Joneses” in terms of their house would be a big deal. In other words, for some Americans, living in the McMansion in the first place is not a problem but not being able to live there long-term is.

A note: the various Real Housewives shows have generated a number of mentions of McMansions over recent years.

Goodbye, McMansions with granite countertops; hello, pre-fab green homes with LEED ratings

Author Sheri Koones thinks the new housing trend is green homes:

The way Sheri Koones looks at it, the next real estate status symbol will be a minuscule heating bill.

“It’s the new bragging rights,” said Koones. “People used to brag, I have granite countertops. Today I think it’s going to be a lot more substantial to say, ‘I pay hardly anything for energy. I’m LEED Platinum” (a certification of residential energy conservation).

Granted, with the housing market still wounded, green construction is hardly likely to dominate cocktail-party chatter anytime soon. But Koones is mindful of our newfound economic sobriety. Declaring “the whole McMansion thing is over,” she’s become a champion of an unlikely-sounding candidate for the Next Big Thing: factory-built housing…

But she doesn’t mean like trailers. She means homes that aren’t constructed start-to-finish on someone’s lot, but largely in manufacturing facilities, sometimes on assembly lines. She’s become such an advocate of these processes that she’s out with her third coffee-table book on the subject.

There does seem to be a growing interest in green homes, partly for their earth-consciousness and partly because of an interest in reducing utility costs. However, I wonder about two things:

1. A granite countertop is a more obvious status symbol than “a minuscule heating bill.” So is a McMansion compared to a pre-fab green home. Of course, one can have less obvious status symbols but then the owner has to do more work talking it up and pointing it out to people. I suppose LEED homes could start displaying plaques or signs that highlight their green status. Plus, is the LEED rating of the pre-fab home enough to overcome people’s conceptions about pre-fab homes?

2. As I’ve wondered before, how do green homes compare in cost? Cutting down heating costs is good but there must be some cost to this up-front. What about resale value, particularly for a pre-fab home?

Another contender for the anti-McMansion: “upscale cottage colonies”

A few days ago I highlighted a photo gallery that suggested a 1938 Cape Cod was the “anti-McMansion.” Here is another contender for that crown: new “upscale cottage colonies.”

Under the direction of Mark DeWitt, the 8-acre Grindell’s RV Park on Old Wharf Road will see its last season this summer. On Nov. 1, ground will be broken for Heritage Sands, a condominium-style cottage colony…

Brennan pointed to similar projects recently opened in Wells, Ogunquit and Kennebunkport, Maine. “These successful shore communities show us what’s possible in cottage design,” he said. “Heritage Sands will offer six cottage styles and include responsible environmental planning.” Brennan noted that The New York Times, Wall Street Journal and Forbes magazine considered the new cottage colonies “the anti-McMansions of the post-bubble real estate market.”…

Cottages will have one, two or three bedrooms with no opportunity to expand. “This is part of our septic approval,” Brennan said. While they can’t add more bedrooms, owners may opt to install solar panels on their roofs, taking advantage of the south-facing site to save on energy bills…

Pre-construction sales on the cottages, which Brennan said start “below $400,000,” begins in March. Brennan said he has a growing list of people waiting to go to contract. “These cottages are going to be unparalleled on the Cape,” he said. “We expect rapid absorption by people who are looking to recapture their summer experience on the Cape as kids. The return on investment will be photo albums and memories passed down from generation to generation.”

Here is what appears to make these cottages anti-McMansions: they are more environmentally friendly, a bonus near the water. There are going to be “colonies” of these homes as opposed to large houses on large lots where people are trying not to interact with others. The homes can’t be expanded and presumably smaller (though we aren’t told about how many square feet they are).

On the other hand, here are some features of these houses that might go against the anti-McMansion idea. They are meant to be second homes where people can recapture their childhood. These are not older houses. They are not exactly cheap. They don’t come with all the green features – solar panels have to be added, driving up costs. In the end, these are still homes for fairly wealthy people.

This leads me to another idea: is one of the new desirable status symbols the anti-McMansion?

How sociology can help explain the high prices of art

Collecting art is an expensive hobby – and sociology can help explain why:

The top art prices may have little to do with classic economics. Noah Horowitz, whose Art of the Deal is a crucial text on the subject, says in the long run your investment in art may only do about as well as your holdings in bonds—and comes with greater risk. (But, as one major New York collector put it, that’s not so bad, if you have nowhere else to store your income. And anyway, “bonds aren’t that good to look at.”) At this moment, when the 1 percent has the cash to burn, buying art is less about finance than about the cultural value of money, and of art. “A dollar is not a dollar is not a dollar,” says Viviana Zelizer, the great Princeton sociologist who wrote The Social Meaning of Money. The dollars spent in Miami are “cultural dollars,” Zelizer says, and that makes them obey their own rules. Below, five reasons why art defies economics…

The sociologist Mitch Abolafia, who has made a study of Wall Street financiers, says that sometimes money speaks for itself. “A trader said to me one day, with glee in his eyes, ‘You can’t see it, but money is everywhere in this room. Money is flying around—millions and millions of dollars.’ It was a generalized excitement about money. Even I felt it.” That’s the excitement we all get from expensive art. One collector, who believes deeply that art should be bought for art’s sake, acknowledges basking in the “robust glow of prosperity” that his purchases give off once their value has soared.

The people who are spending record amounts on art buy more than just that glow. (And much more than the pleasure of contemplating pictures, which they could get for $20 at any museum.) They’ve purchased boasting rights. “It’s, ‘You bought the $100 million Picasso?!,’” says Glimcher. Abolafia explains that his financiers were “shameless” in declaring the price of their toys, because in their world, what you buy is less about the object than the cash you threw at it. The uselessness of art makes any spending on it especially potent: buying a yacht is a tiny bit like buying a rowboat, and so retains a taint of practicality, but buying a great Picasso is like no other spending. Olav Velthuis, a Dutch sociologist who wrote Talking Prices, the best study of what art spending means, compares the top of the art market to the potlatches performed by the American Indians of the Pacific Northwest, where the goal was to ostentatiously give away, even destroy, as much of your wealth as possible—to show that you could. In the art-market equivalent, he says, prices keep mounting as collectors compete for this “super-status effect.”…

I’m convinced that most collectors spend their surplus millions on art because they have a genuine belief in its aesthetic value. “We don’t consider art an investment. We get a psychic reward—I love to come home and look at our walls,” says Eli Broad, a prominent collector from Los Angeles, taking a break from shopping with his art-loving wife at the fair in Miami. (They’d just bought some early Cindy Sherman photos, for sale at Metro Pictures for a modest $150,000.) Aesthetics are the bedrock the art market is built on. But, for want of any other reliable measure, they often get tallied in dollars. One of New York’s biggest dealers told Velthuis, the Dutch sociologist, that collectors “permanently have to explain to themselves why they spend so much money on art, sometimes up to 40 percent of their total net worth. So that they want to hear all day long that it makes sense what they do.” And the easiest way to gauge the aesthetic “sense” of an art purchase is to check out the “cents” the thing is selling for. When you’re looking for great art, you may spot it by its price tag.

Sounds like a common sociological explanation: status matters. In order to show their social status or to break into elite circles, people with money buy art.

It would be interesting to read more about how this plays out with emerging artists. After watching Exit Through the Gift Shop, it looks like there is quite an interest in “discovering” and capitalizing on the “next best thing.” It’s one thing to be able to buy works by the masters but another to find the next Banksy and become a new patron.

And can the wealthy create a different kind of status by donating their works to museums or traveling exhibitions to show that they are sharing?

Generation Y sees the downsides to cars

A short article from Kiplinger suggests Generation Y has a different relationship to the automobile than previous generations. Rather than viewing them as status symbols, Generation Y sees them as polluting objects and the use of mass transit and car sharing is on the rise.

This has car makers worried:

The trend won’t cause car sales to tank, of course, but the generational shift doesn’t bode well for manufacturers and auto dealers, which for decades have counted on wooing young new drivers to their brands in hopes of cementing lifetime customer relationships.

Gen Yers are a big potential market: At 80 million strong, they represent the biggest generation in U.S. history. Baby boomers are a close second, but millions of them begin turning 65 next year — an age at which car purchases drop off sharply.

There is nothing that guarantees that the American obsession with the car will continue. It sounds like manufacturers will need to change their tack and convince people that they need cars – perhaps it could be tied to ideas about personal freedom.

If this is the case among Generation Y, this has big implications for urban planning and the suburbs.