Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles

Vladimir Tsurikov

doi:10.52957/2221-3260-2024-11-12-33

DEMAND, LAW OF DEMAND, GIFFEN AND VEBLEN EFFECTS. PART 2. NON-FUNCTIONAL DEMAND AND DEMAND PUZZLES Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles

АА Аа

Published in Theoretical economics · Issue 11 · Pages 12–33 · Rubric: ACTUAL PROBLEMS OF THEORETICAL ECONOMY

DOI: https://doi.org/10.52957/2221-3260-2024-11-12-33

Received: 06.11.2024 Accepted: 15.11.2024 Published: 16.01.2025

Authors

Vladimir Tsurikov

ORCID

Vladimir Tsurikov

Academic degree: doctor of economic sciences

Science rang: professor

Kostroma State Agricultural Academy Russian Federation · Kostroma

ORCID

ABSTRACT

The present work is a brief review of domestic educational and scientific literature upon the issues of non-functional (according to Leibenstein’s classification) demand. To take into account the influence of social factors, the concept of conspicuous consumption by T. Veblen is used. Attention is paid to inaccurate and controversial statements found in literature, as well as to cases of incorrect interpretation of some types of non-functional demand formed under the influence of social determinants. First of all, this refers to the practice of incorrectly interpreting the Veblen effect as an exception to the law of demand and conspicuous consumption as irrational behavior. A number of recent studies convincingly indicate that conspicuous consumption is capable of exerting a favorable psychological effect on the individual who exhibits it, thereby contributing to an increase in their level of well-being. Using the example of the dissertation services market, it is shown that buyers of custom dissertations who often experience amazing “psychological metamorphoses” subsequently receive the opportunity to successfully convert the acquired symbolic capital into certain privileges. The mathematical model of the Veblen effect proposed in the article allows asserting that the Veblen effect may as well manifest itself as a result of the rational choice of the consumer who may be an individual with any level of income, except for the lowest, completely excluding the possibility of any choice of consumed goods. It is shown that in some cases, to explain the dynamics of demand for a particular good, it is sufficient to take into account the “competition” of the Veblen, price, bandwagon, and snob effects without any reference to paradoxes or exceptions to the law of demand. Along with this, examples of consumer behavior and demand are given, for the interpretation of which Leibenstein’s classification is insufficient.

KEYWORDS

law of demand, non-functional demand, conspicuous consumption, Veblen effect, symbolic good, prestige, status

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Tsurikov V. I. Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles // Theoretical economics. 2024. no. 11. pp. 12-33. DOI: https://doi.org/10.52957/2221-3260-2024-11-12-33. (Date of access 30.10.2026).

MLA

Vladimir Tsurikov. "Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles." Theoretical economics.11 (2024): 12-33. DOI: https://doi.org/10.52957/2221-3260-2024-11-12-33.

APA

Tsurikov V. I. (2024). Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles. Theoretical economics(11), 12-33. https://doi.org/10.52957/2221-3260-2024-11-12-33

Chicago

Vladimir Tsurikov. "Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles." Theoretical economics, no. 11 (2024): 12-33. https://doi.org/10.52957/2221-3260-2024-11-12-33.

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{{cite journal | author = Tsurikov V. I. | title = Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles | journal = Theoretical economics | year = 2024 | issue = 11 | pages = 12-33 | doi = 10.52957/2221-3260-2024-11-12-33 }}

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DEMAND, LAW OF DEMAND, GIFFEN AND VEBLEN EFFECTS. PART 2. NON-FUNCTIONAL DEMAND AND DEMAND PUZZLES Demand, law of demand, Giffen and Veblen effects. Part 2. Non-functional demand and demand puzzles

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