In certain professions, luxury goods can send the wrong signal
Imagine yourself at a meeting with an accountant. You spot a Rolex watch on her wrist, and a Louis Vuitton handbag on her desk. Seeing those luxury goods might inspire confidence—after all, the accountant must be good at her job if she can afford them.
Now imagine yourself confessing your innermost hopes and fears to a therapist who is sporting the same flashy items. Would you view her as favorably?
Maybe not, according to a new paper by Derek Rucker, a professor of marketing at the Kellogg School, on the surprising (and potentially unfair) downsides of luxury consumption.
Over several decades, researchers have observed a Range Rover–sized pile of benefits from conspicuously consuming luxury goods. High-status brands, these papers found, might help you get a date, obtain a job, secure a charitable donation, and receive more money in a negotiation.
But Rucker and his coauthor, Kellogg PhD candidate Christopher Cannon, suspected there may be more to the story. “Chris and I asked ourselves whether, economic costs aside, luxury consumption was really all gravy,” Rucker says.
In a series of experiments, Rucker and Cannon found evidence for their hunch; luxury goods can have a downside beyond their high price tag. While sporting luxury brands boosted perceptions of a person’s status, they observed, it also led them to be seen as less warm. The research also explored how this “social tax” on luxury might play out in a hiring context. When people seek candidates for jobs associated with prestige, it turns out, they might favor candidates who consume luxury goods. But when the job involves interpersonal warmth, consumers who wear luxury goods might be viewed more negatively.
What’s more, Rucker and Cannon explored why we view luxury consumers as cold.
“We don’t find evidence in this work that the effects are driven by envy,” Cannon says. “We find evidence that luxury consumption can lead people to infer certain motives.” Specifically, when people assume that someone has donned luxury goods in order to show off, this can lead them to see that person as less warm.
The Downside to Luxury
Rucker and Cannon started with an experiment designed to broadly analyze the relationship between luxury consumption and perceptions of warmth. They recruited 120 online participants, who were asked about their impressions of a man in a photograph. Half the participants saw a man in a plain blue t-shirt. The other half saw the same man in the same blue t-shirt, but adorned with a prominent Gucci logo.
Next, participants were asked a series of question about the man they’d just seen. They were asked to rate how warm, caring, and sympathetic he seemed, and how much they associated him with having status. They also rated to what degree they believed the man had worn that particular shirt to impress other people, and how much they envied him.
The experiment replicated what other researchers had found—luxury consumption elevated the person’s perceived status. The man in the Gucci t-shirt was rated as more prestigious and elite than the man in the plain t-shirt. But importantly, Rucker and Cannon also discovered something novel: participants saw the Gucci-sporting man as less warm overall.
Envy didn’t seem to be an important part of the story: no difference emerged in levels of jealousy between participants who saw the man in the plain t-shirt and those who saw him wearing Gucci.
However, motivation did matter: participants who saw the man in Gucci viewed him as seeking to show off and impress others.
When Is Luxury a Good or Bad Thing?
So does luxury help or hurt you? As Rucker and Cannon demonstrated in their next experiment, it depends.
The researchers recruited 115 participants and asked them to participate in a mock hiring process. They first asked participants to fill out a questionnaire about their hobbies and interests.
Then, the researchers gave them similar questionnaires ostensibly filled out by two other participants, along with two job descriptions: one for a corporate publicist and one for a human resources coordinator. The description of the publicist role highlighted the importance of being part of an elite social network to boost the company’s image, while the description of the human resources coordinator role highlighted the importance of being able to handle interpersonal issues and get along with anyone. Next, the study participants were asked, based on the questionnaires, which person they would hire for each role.
“Someone could be the nicest person in the world—they just happen to like designer scarves. And all of a sudden, you’re judging them as if they might be a little less trustworthy, which I find both fascinating and also unsettling.”
— Derek Rucker
In actuality, the questionnaires the participants received had been created by the researchers to assess the effects of luxury. One contained several references to luxury brands such as Burberry and Porsche, while the other did not mention any high-status items or brands.
If luxury consumption didn’t influence job selection, you would expect each candidate to have a 50 percent chance of getting either job—“a coin flip,” says Rucker.
But that’s not what happened: participants chose the luxury-consuming candidate for the corporate publicist job 73 percent of the time, and the average Joe only 27 percent of the time. Meanwhile, the luxury consumer had only a 13 percent chance of getting the HR job, while the other candidate had an 87 percent chance.
Even though the questionnaires didn’t reveal anything about either person’s skills or qualifications, Rucker acknowledges he could see himself doing what the study participants did.
“Had I been put in this situation, without knowledge of this research, I too might have chosen this person who mentioned Prada, Burberry, and Porsche for the publicist role,” he says. “But now I’d probably hesitate, since that might not reflect any substantive differences in the person’s ability to perform the job.”
Dressing to Impress?
Where does this idea that luxophiles are cold come from?
To find out, the researchers recruited 102 online participants and showed them the same man in either the plain or Gucci t-shirt. The participants then answered a similar set of survey questions about status, warmth, and why they think people typically purchase luxury items. The results largely replicated those of the first study: luxury consumption was, on average, associated with both higher status and less warmth.
But this time, the researchers crunched the data on the subset of participants who did not believe that, in general, people wear luxury brands to impress others. Among these participants, they found, the man with the Gucci t-shirt wasn’t viewed as less warm.
To the researchers, this finding suggested two things: first, the belief that people wear high-end goods in order to show off can lead people to view luxury consumers as unfeeling. However, it also meant “this isn’t necessarily a problem for everyone,” Rucker explains. “Having a luxury label may not have as negative an effect when people believe luxury is not used solely to impress.”
Conspicuous Consumption: It’s Complicated
The negative perception of those who enjoy luxury items may not be accurate at all, the authors explain.
“Someone could be the nicest person in the world—they just happen to like designer scarves,” says Rucker. “And all of a sudden, you’re judging them as if they might be a little less trustworthy, which I find both fascinating and also unsettling.”
Adds Cannon: “People might purchase luxury brands because they appreciate the aesthetics, enjoy the quality of the workmanship, or want to fulfill a personal desire for self-expression. Luxury doesn’t have to be about flaunting wealth.”
So, should consumers shy away from luxury goods out of fear of alienating others? Rucker and Cannon wouldn’t go that far.
“We’ve shown situations exist where luxury consumption produces positive outcomes,” Rucker points out—such as when filling the corporate publicist role in the experiment. “Rather than luxury always being good or always being bad, it depends on whether status or warmth is more important.”
Indeed, the authors point out that the study reveals the need for researchers to keep exploring when luxury consumption has positive versus negative consequences. “As a starting point, knowing whether status or warmth is what you’re primarily being evaluated on will help you decide whether you should wear the Burberry scarf to the event,” Cannon says.