Social benefits of luxury brands as costly signals of

wealth and status

Garrett Stein and Briana Todhunter

Zahavi’s Handicap Principle• Definition: Signals costly to the sender are honest

indicators of the males condition and his ability to bear the burden demonstrates high male quality.

• Social Status: higher position compared to others on some dimension that is deemed important by society.

• Conspicuous Consumption: “a preference for more expensive goods over cheaper yet functionally equivalent goods.”

Criteria for Costly Signals

1. Signal must be easily observable.-Luxury brands are visually labeled with recognizable logos.

2. Signal must be hard to fake because of its associated cost.

-Luxury brands are known to be relatively more expensive than other brands

available; only acquirable with sufficient funds.

Costly Signals Cont.

3. Signal must be associated with an unobservable but desirable individual quality.

-Luxury brands are associated with ability to more successfully acquire resources. Ability to acquire resources is an attractive quality because it is associated with providing for mates and offspring and higher social status. 4. Signal must ultimately yield fitness benefit.

-People who display luxury brands ought to have higher reproductive success because of the resulting preferential treatment.

General Hypothesis and Predictions

• Luxury brands should lead to perceptions of higher wealth and social status due to perceiving luxury brands as costly signals.

• These perceptions should lead to preferential treatment in social interactions including increased compliance and generosity in resulting financial benefits.

• If the luxury symbols are no longer reliant signals of wealth/ status, they will not result in favorable treatment.

Study 1- Status PerceptionsHypothesis: luxury brands will be associated with perceptions of wealth and high status.

Methods:-People were shown pictures of a man wearing either no label, an ordinary label, or one of two luxury labels.-People then filled out a questionnaire measuring perceptions of status, wealth, attractiveness, kindness, and trustworthiness.

Study 1 Cont.• Results:– People received higher status ratings and were

perceived as wealthy when wearing luxury brand labeled shirts when compared to the ordinary label or no-label shirts.

– Perceptions didn’t differ on other measured ratings like attractiveness or kindness.

• Main Point: perceived wealth is a primary status enhancing quality as manipulated by brand labels.

Study 2- ComplianceHypothesis: perceptions associated with luxury brands will increase likelihood of compliance in social situations. Methods:

-Shoppers in a mall were approached by a woman with a clipboard wearing either a no-label sweatshirt or a Tommy Hilfiger branded sweatshirt. -She asked them to answer some question.

Study 2 Cont.

• Results: participants in the brand label condition complied with the request 52.2% of the trials compared to 13.6% of the no-label condition.

• Main Point: luxury displays produce benefits in social interactions as getting people to comply with your requests can eventually lead to increased fitness for the sender.

Study 3- Social Preferences• Hypothesis: Wearing a luxury brand will make the

sender more likely to be perceived as being suitable for a job and deserving of a higher wage.

• Methods: – Participant watched a video of a job interview with the

male interviewee wearing either no label or a Tommy Hilfiger labeled shirt.

– Subject then had to rate them on their perceived suitability for the job and what they believed the interviewee should earn for the job. Also measured perceived status, attractiveness, kindness and trustworthiness of interviewee.

Study 3 Cont.• Results: – Participants in the brand label condition found the applicant

more suitable for the job on average.– Also suggested the interviewee earn more money when wearing

a luxury brand.– Brand label condition interviewee had higher average status

ratings than no-label interviewee. No difference on other ratings.

• Main Point: luxury brands led to preferential treatment in social interactions, specifically regarding competitive opportunities.

Study 4- Charity Donations

Hypothesis: people are more likely to donate real money to people wearing luxury brands compared to people with no labels.Methods:- Confederate wearing a polo either with a Lacoste logo or no logo would go door to door in a low SES neighborhood asking for donations to the Dutch Heart Foundation.

Study 4 Cont.

• Results: Donations to luxury brand confederates were on average higher than donations to no-label confederates.

• Main Point: luxury displays cause financially beneficial treatment in real life conditions, even when treatment is costly to the receiver of the signal.

Study 5 & 6- Reliability of Costly Signaling• Hypothesis: brand labels will only produce

preferential treatment in a social situation if they are in fact known to be costly to the sender.

• Methods: Financial Interaction Game• Situation where if they give their

partner a coin, he gets double the amount. You can also decide to keep your coins for their face value.

• Study 5: Luxury label vs. ordinary label.

• Study 6: Incidental vs. Intentional and luxury label vs. no label.

• In both situations a questionnaire measuring status was given.

Study 5 & 6 Results• Study 5- Transfers in the luxury label condition exceed

transfers in ordinary label condition – Luxury label also received higher status ratings.

• Main Point- brand labels are perceived as costly signals and result in status enhancement/ produce beneficial social consequences only insofar as they are actually costly to acquire.

• Study 6- Transfers to people wearing luxury brand labels were higher if they were believed to own the shirt as opposed to those believed to be asked to wear the shirt.– No effect of perceived ownership in no-label condition.

• Main Point- Luxury labels only produce beneficial consequences if they are seen to be a reliable indicator of the status of the sender.

Study 7- Dictator Game• Hypothesis: people partnered with luxury brands

will transfer more money than those partnered with no-label partners.

• Methods:– Same technical methods for viewing pictures and

allocating money to partner.– Assigned a “dictator” role in the game where they

would decide how to distribute €10 between their partner and themselves. Their fictitious partner had no choice.

– Partner was either wearing a Lacoste polo in the picture or the same polo with the logo removed.

Study 7 Cont.

• Results: people transferred more money in luxury label condition than in no-label condition.• Main Point: Financial

benefits in social situations are more likely to be given to conspicuous consumers even when there is no chance for reciprocity.

General Discussion• Signal must be observable.– In all studies, each person or picture was held constant across

conditions when only the presence of a label was different.

• Signals must be associated with a real cost so they cannot be easily faked.– Studies that compared ordinary labels and luxury labels still

found advantages with luxury labels showing that people recognized the value of luxury labels over other cheaper labels. Only worked when they were reliable indicators.

• Signal must be associated with an unobservable but desirable individual quality.– Perceptions of higher status and associated wealth were found

in all studies where questionnaires measuring perceptions of personal qualities were given.

General Discussion• Signal must ultimately yield a fitness benefit.– In study 2, wearing luxury brands led to increased

likelihood of compliance when asking for a small favor.– In study 3, wearing luxury brands increased

perceptions of suitability for a job and perceived as deserving higher wages.

– In study 4, people were more likely to donate real monetary benefits to people wearing luxury brands.

– In a social dilemma scenario, people were likely to give more money to partners wearing luxury brands than ordinary or no-label partners.

Limitations and Implications

• Use of more subjects from different cultures and lower SES.• What are the specific characteristics of somebody with high

status that people find attractive? Further in-depth questionnaires for future studies.

• Is their an observed sex difference? Who should be more attracted to luxury brands?

• Are job selection procedures being biased by cues of status rather than cues that reliably indicate relevant traits?

• Consumption may be a more effective way of communicating traits than natural ways through interpersonal communication.