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Due to a number of trends and diets, the popularity of certain products has led to a massive increase in price. What are the reasons?
Back in the 1990s, retailers discovered that with certain products, such as designer jeans, the more they increased the price the more consumers wanted them. These products are known as Veblen goods. American economist, Thorstein Veblen, was the first to identify conspicuous consumption as a type of status-seeking.
That’s right, hipsters.
Veblen goods are an absurd contradiction to the law of demand. A consequence of the Veblen effect (where goods are desired for being over-priced) is that any decrease in their price also decreases their demand.
These products are in demand because of, rather than in spite of their high price tags. They could include expensive wines, jewellery, luxury cars, name-brand clothing and most infuriatingly – anything with the words ‘gourmet’, ‘craft’ or ‘artisan’ in the name.
Certain trends and new diets, for example, may influence the price of particular items. These items may be part of what was once every day, normal consumption. This makes it difficult for the average consumer to continue buying them. We used to be able to afford these things, now it’s fashionable – and now they’re ridiculously expensive.
Cauliflower, anyone? Thanks a lot, Banting diet.
In microeconomics, there are several theoretically possible anomalies in the general law of demand. Veblen goods are but one in a family of these effects.
Related Concepts
Studies have found evidence suggesting that people receive more pleasure from more expensive goods. This is due to a number of factors. The Snob Effect: For consumers who want to use exclusive products, because they are different from those commonly preferred. Price = quality. The Bandwagon Effect: A psychological effect. Preference for items increases as the number of people buying them increases. The Network Effect: The value of an item increases as the number of buyers or users increases. For instance, as the number of people on Facebook increases, so does the value of being on Facebook – since you could reach a greater audience. The Common Law of Business Balance: The low price of goods indicates that the producer may have compromised quality. You get what you pay for. For instance, if you buy something with the Made In China brand – chances are pretty good that it will break, stop working, malfunction, cause a terrible house fire and / or fall apart within a week.Products You Once Loved
No herd of flannel-wearing, Woody Allen-worshipping consumers have slipped into mass market disgrace harder or faster than the hipster. They wrote the (independently-published) book on how to conform to non-conformity. Most of us really couldn’t care less which trends other people choose to follow. Live and let live, and all that jazz. But when these trends start to influence our own shopping habits, even the most resolute of consumers stand up and take notice. The vinyl revival, for instance, is great news for both the music business and fans alike. Most true audiophiles prefer the quality of vinyl and the music business has never truly recovered the ground it lost to illegal downloading. So, this is good news for everybody. However, vinyl is now priced as a premium product. You can expect to pay upwards of double the CD price for an album on vinyl, depending on the rarity. Likewise, precious parts of history such as gramophones, VHS players and typewriters have become either luxury buys or the butt of ironic jokes. Not only that, but charity stores (or thrift stores) such as Salvation Army have seen a disturbing increase in price inflation. Most of what they stock has been donated by the public. These stores, which pedal second hand goods and clothing, have grown more popular with the hashtag-abusing, unicorn-toast munching lemmings. With that popularity, low-income shoppers who can’t afford to shop anywhere else have now felt the pinch. The biggest crisis regular consumers are facing, however, is the rising cost of certain foods. Cauliflower, almonds, macadamias, zucchini, cream cheese and olive oil. Not convinced? Kale, coffee, asparagus, vanilla beans, juicing and coconut oil. They’ve all been made unsustainable and unaffordable, thanks entirely to these trends. No greater casualty has there ever been, though, than the avocado pear.Has car insurance become unaffordable? Compare quotes today and save up to 35% on insurance!
The Avocado Latte, and Other Disgraces
Avo roses, avo brownies, one million types of guacamole and forget all about avo smoothies – avo lattes are an actual thing now. That’s right. For no good reason at all, people are now serving lattes in the hollowed-out skin of an avocado. You are sipping your pompous little drink out of what is, essentially, trash. People’s avocado adulation has reached fever-pitch, and it’s destroying everything. The global demand for avocado has become so unrealistic that leading producers in Mexico, California, and Peru have had to raise their prices to an unprecedented high. The international appetite for this super-fruit is indirectly fuelling illegal deforestation and environmental degradation. Farmers are disregarding laws and thinning out the forests in order to plant young avocado trees instead. You may wonder what’s so bad about swapping one type of tree for another. Unlike regular, natural forestation, avocado trees need repeated cycles of chemical inputs and need to be sprayed with fertilisers and pesticides. They soak up irrigation water too, putting pressure on local water reserves. It is estimated that it takes upwards of 200l to grow just half a kilogram of avo. Surgeons over in Britain also had to issue a warning to avocado-eating millennials, who apparently lack the wrist strength or hand-eye coordination to properly destone the fruit without injuring themselves. So frenzied has our avocado-gluttony become, that these injuries even have their own name. ‘Avocado hand.’ Surgeons are calling for safety labels to be placed on the fruit – and some other people believe the solution to most of the world’s problems is to do the exact opposite. Remove all the warning labels in the world, and sooner or later the problems will sort themselves out.