What if diamonds did not last forever? Signaling status achievement through ephemeral versus iconic luxury goods

Abstract

Individuals signal status through luxury goods because high status confers social, economic, and psychological benefits. While it is known that luxury (vs. non-luxury) consumption signals individuals' high (vs. low) level of status, it is unclear how individuals' marketplace behaviors influence perceptions of type, or source, of their status. The present research examines how ephemeral and iconic luxury consumption signals individuals' achieved or ascribed social status. Seven studies (and two follow-ups) show that, while ephemeral and iconic luxury consumption signal similar levels of individuals' ascribed status, ephemeral luxury consumption signals individuals' higher achieved social status than iconic luxury consumption. This happens because ephemeral luxury consumption signals individuals' higher creativity than iconic luxury consumption. We outline the boundaries of this phenomenon and demonstrate its behavioral downstream consequences. Our findings offer guidance on how individuals and managers can leverage the status signaling value of ephemeral and iconic luxury goods.