£100 pizza with pineapple – conspicuous consumption

You might have seen in the news of a pizza restaurant in the UK charging £100 (NZ$218) for a Hawaiian pizza. Lupa Pizza in Norwich charged £100 for the delivery of a Hawaiian Pizza because they don’t approve of the combination i.e. pineapple on pizza. The assumption from Lupa is that such a high price would lead to a reduction in quantity demanded. Furthermore, the dissatisfaction of producing a Hawaiian pizza is compensated by the higher price – “I don’t like putting pineapple on pizza but I am getting £100”. The publicity that this got reminded of a previous blog post on ‘Supreme’ where T shirts that were selling for up to £400. Here we have conspicuous consumption where consumers can display their wealth by buying a £100 pizza.

Conspicuous consumption was introduced by economist and sociologist Thorstein Veblen in his 1899 book The Theory of the Leisure Class. It is a term used to describe the lavish spending on goods and services acquired mainly for the purpose of displaying income or wealth with the demand curve sloping up from left to right – see graph. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. A very comparable but more informal term is “keeping up with the Joneses”.

Geoffrey Miller is his book – Spent: Sex, Evolution, and Consumer Behaviour – examines conspicuous consumption in order to rectify marketing’s poor understanding of human spending behaviour and consumerist culture. His thesis is that marketing influences people—particularly the young—that the most effectual means to show that status is through consumption choices, rather than conveying such traits as intelligence and personality through more natural means of communication, such as simple conversation. He argues that marketers still tend to use naive models of human nature that are uninformed by advances in evolutionary psychology and behavioural ecology. As a result, marketers “still believe that premium products are bought to display wealth, status, and taste, and they miss the deeper mental traits that people are actually wired to display—traits such as kindness, intelligence, and creativity”.

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