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Central thesis: Why do people spend money on luxury goods despite cheaper alternatives?

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Central thesis: Why do people spend money on luxury goods despite cheaper alternatives?

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"These objects have value beyond their practical utility" (Bloom 11).

This quote highlights the appeal of luxury items, as their aesthetic qualities evoke feelings of joy and personal expression. Additionally, luxury goods are positional goods, valued in comparison to what others have. Moreover, luxury goods act as status symbols, signaling wealth and desirable traits, allowing owners to come off as sophistication and success.

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People buy luxury goods for their beauty and their emotional pleasure

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Luxury goods act as a status symbols, signaling wealth and desirable traits

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Luxury goods are positional goods, valued in relation to what others have

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"'Decoration and adornment are neither higher nor lower than ‘real’ life,” Postrel writes. 'They are part of it.'" (Bloom 2).

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"'Decoration and adornment are neither higher nor lower than ‘real’ life,” Postrel writes. 'They are part of it.'" (Bloom 2).

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This book is a secondary source. Postrel suggests that decoration and adornment-often reviewed as secondary-are integral to human life rather than being lesser evidence. The phrase "neither higher nor lower" emphasizes that these forms of expression should not been seen as insignificant in comparison to functional aspects of life. Instead, they hold their own value. Postrel notes that there is nothing wrong with this perception of aesthetics, and their significance could shape identities and experiences.

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"Evolutionary psychologist Geoffrey Miller gives this theory an adaptationist twist, arguing that the hunger for these luxury goods is a modern expression of the evolved desire to signal attractive traits—such as intelligence, ambition, and power—to entice mates" (Bloom 3).

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"Evolutionary psychologist Geoffrey Miller gives this theory an adaptationist twist, arguing that the hunger for these luxury goods is a modern expression of the evolved desire to signal attractive traits—such as intelligence, ambition, and power—to entice mates" (Bloom 3).

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This is also a secondary source. Bloom uses Miller's theory to suggest that the desire for luxury goods is deeply rooted in psychology. Humans have adapted their consumption habits to show off desirable traits in search for a partner, or in search for others to view them as more valuable.

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"If everyone else buys fancy suits for their job interviews, then I risk unemployment by choosing not to" (Bloom 3).

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"If everyone else buys fancy suits for their job interviews, then I risk unemployment by choosing not to" (Bloom 3).

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This is a secondary source. Here, Bloom uses this hypothetical situation to get across an important thought- if something is bought in hopes of enhancing one's status, it would become considered a positional good (value determined by what others have). This is inspired by Robert H. Frank's “luxury fever" theory that suggests that individuals seek to outdo each other by purchasing expensive and often unnecessary items to signal social status. The pressure to keep up to social standards and "have what others have" per say, is another reason people buy expensive things despite other options.

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Definition (per Merriam-Webster Dictionary): To direct or notify by a movement or gesture

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Definition (per Merriam-Webster Dictionary): Very pleasing to look at

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Definition (per Merriam-Webster Dictionary): Something adding to pleasure or comfort but not absolutely necessary

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Not all luxury items are only used for signaling, many people appreciate the comfort or functionality rather than the social signaling. An example would be Gucci Belts (valued around $400), they could be worn to simply adjust the fit of pants. This challenges the notion that luxury is always tied to status

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Not all luxury items are status-oriented. Some may collect luxury items for their historical significance, seeing them as expressions of culture, and not a signal of wealth.

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"Consistent with this, neuroscience studies reveal that when people look at products they judge to be "cool," brain areas associated with praise and social approval are activated" (Bloom 2).

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"Consistent with this, neuroscience studies reveal that when people look at products they judge to be "cool," brain areas associated with praise and social approval are activated" (Bloom 2).

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This source is a secondary source. This quote underscores the significant psychological impact of luxury goods, showing how the perceptions of "coolness" can trigger brain responses linked to social validation and approval. By activating areas associated with praise, these items serve as a channel for social recognition, suggesting that the emotional pleasure derived from luxury goods is rooted in both individual appreciation.

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"Some goods, including luxury goods, are valued for properties that have nothing to do with what other people think, so worries about arms races just don’t apply" (Bloom 9).

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"Some goods, including luxury goods, are valued for properties that have nothing to do with what other people think, so worries about arms races just don’t apply" (Bloom 9).

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This is a secondary source. This quote suggests that the worth of certain items, specifically luxury items, can be derived from their inherent qualities rather than social status or the opinions of others. This perspective gives one a deeper understanding of consumer behavior, suggesting that personal satisfaction may outweigh societal pressures.

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These two quotes having contrasting bigger pictures. It lies primarily in the role of societal perception in valuing luxury goods. The first quote (in purple) suggests that luxury goods are valued based on what others have, and not having that could lead to a downgrade in status. The second quote (in red) says that luxury goods could be appreciated without the thought of others, or societal pressures to conform. These two quotes offer two different stances on a similar issue.

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"Economist Richard Layard argues that contemporary research—the “new science of happiness”—shows that our happiness is exquisitely sensitive to relative status. If my neighbor owns a fancy car and I want one but don’t have it, this will make her happy and me sad" (Bloom 9).

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"Economist Richard Layard argues that contemporary research—the “new science of happiness”—shows that our happiness is exquisitely sensitive to relative status. If my neighbor owns a fancy car and I want one but don’t have it, this will make her happy and me sad" (Bloom 9).

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This is a secondary source. This quote illustrates the concept of positional goods, implying that our happiness is influenced by social comparisons rather than absolute wealth. Layard's assertion presents the idea that relative status can strongly impact one's well-being. This reinforces the thought that luxury goods get their meaning from their significance in a social hierarchy, where ownership directly impacts emotional states.

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Paul Bloom's claim: we, as humans, “are not primarily sensory creatures. Rather, we respond to what we believe are objects’ deeper properties, including their histories” (Bloom 4). 

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Paul Bloom's claim: we, as humans, “are not primarily sensory creatures. Rather, we respond to what we believe are objects’ deeper properties, including their histories” (Bloom 4). 

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Despite Bloom making claims about luxury good consumption being based on aesthetics, signaling, and the idea of positional goods, his claim suggests a different perspective. Bloom deems the sources previously provided (in purple) incomplete, or insufficient, and instead suggests that the consumption of luxury goods goes beyond physical attributes. Bloom believes that our connection to objects is rooted in the emotional and psychological weight we assign to their stories based on their history, not just their physical form.