Phase IFoundation
Background
Overview
Understanding consumer behavior, especially in a developing economy like India, is crucial for policy-making related to financial literacy, savings, investment, and inclusive growth. It highlights challenges in resource allocation and the pursuit of sustainable prosperity.
The Veblen Effect describes a phenomenon in economics where the demand for a good increases as its price increases, contrary to the law of demand. This occurs because the higher price makes the good more desirable as a symbol of status and prestige, rather than for its intrinsic utility. It is closely related to conspicuous consumption, which refers to the purchase of goods or services for the purpose of publicly displaying economic power or social status.