The Political Economy of Status

The Political Economy of Status

Superstars, Markets and Culture Change

Theodore Koutsobinas

In this timely book Theodore Koutsobinas explores the system of status markets and their social effects including inequality. He explains how media fascination with superstars and luxury consumption goods amplify positional concerns for all, distort the aspirations of the middle class and cause relative deprivation. Building on themes first identified by Veblen and Galbraith, Koutsobinas analyses extensively the behavioural evidence from modern interdisciplinary research and contributes constructively to a new genre of economic analysis. The Political Economy of Status compels us to consider seriously redistributive culture change policies targeted to assist the underprivileged. This book will be a valuable and lively reading resource for academics in various fields including economic theory, political economy, sociology, social psychology and cultural studies.

Chapter 4: Psychology and behavioural forces

Theodore Koutsobinas

Subjects: economics and finance, behavioural and experimental economics, cultural economics, economic psychology, political economy, politics and public policy, political economy, social policy and sociology, sociology and sociological theory


Since preferences and motives play an important role in status markets, explaining positional activities solely on the basis of economic principles constrains the analysis. A fundamental question that usually arises is why preferences change towards specific goods, services or activities. While one cause is the influence of economic environment, there are several subjective factors that require closer examination. For example, certain changes in preferences towards positional goods, services or activities may be attributed to a sort of subjective bias or to our perceptions of self-worth. These are forces that are dealt better within the field of social psychology rather than within the domain of economics. It is obvious therefore that we have to expand the range of analytical tools, which are suitable for the study of status markets so that we include the influence of psychological considerations. This will help identify cases, in which status is important because of behavioural factors such as the quest for approval or recognition by other people rather than financial rewards. Another task is to examine the cognitive limitations of human beings, which surface in certain situations and shape the manner in which preferences are expressed. In addition, we need to examine how in the context of subjective analysis interpersonal considerations arise and what role they play with regard to the distortions of status markets.

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