Social benefits of luxury
brands as costly signals of
wealth and status
Garrett Stein and Briana Todhunter
Zahavi’s Handicap Principle
• Definition: Signals costly to the sender are honest
indicators of the males condition and his ability to
bear the burden demonstrates high male quality.
• Social Status: higher position compared to others
on some dimension that is deemed important by
society.
• Conspicuous Consumption: “a preference for
more expensive goods over cheaper yet
functionally equivalent goods.”
Criteria for Costly Signals
1. Signal must be easily observable.
-Luxury brands are visually labeled with
recognizable logos.
2. Signal must be hard to fake
because of its associated cost.
-Luxury brands are known to be relatively
more expensive than other brands
available; only acquirable with sufficient
funds.
Costly Signals Cont.
3. Signal must be associated with an
unobservable but desirable individual quality.
-Luxury brands are associated with ability
to more successfully acquire resources.
Ability to acquire resources is an attractive
quality because it is associated with
providing for mates and offspring and higher
social status.
4. Signal must ultimately yield fitness benefit.
-People who display luxury brands ought to
have higher reproductive success because of
the resulting preferential treatment.
General Hypothesis and
Predictions
• Luxury brands should lead to perceptions of
higher wealth and social status due to
perceiving luxury brands as costly signals.
• These perceptions should lead to preferential
treatment in social interactions including
increased compliance and generosity in
resulting financial benefits.
• If the luxury symbols are no longer reliant
signals of wealth/ status, they will not result in
favorable treatment.
Study 1- Status Perceptions
Hypothesis: luxury brands will be associated
with perceptions of wealth and high status.
Methods:
-People were shown pictures of
a man wearing either no label,
an ordinary label, or one of two
luxury labels.
-People then filled out a
questionnaire measuring
perceptions of status, wealth,
attractiveness, kindness, and
trustworthiness.
Study 1 Cont.
• Results:
– People received higher status ratings and were
perceived as wealthy when wearing luxury brand
labeled shirts when compared to the ordinary
label or no-label shirts.
– Perceptions didn’t differ on other measured
ratings like attractiveness or kindness.
• Main Point: perceived wealth is a primary
status enhancing quality as manipulated by
brand labels.
Study 2- Compliance
Hypothesis: perceptions associated with luxury
brands will increase likelihood of compliance in
social situations.
Methods:
-Shoppers in a mall were
approached by a woman
with a clipboard wearing
either a no-label
sweatshirt or a Tommy
Hilfiger branded
sweatshirt.
-She asked them to
answer some question.
Study 2 Cont.
• Results: participants in the brand label
condition complied with the request 52.2% of
the trials compared to 13.6% of the no-label
condition.
• Main Point: luxury displays produce benefits
in social interactions as getting people to
comply with your requests can eventually lead
to increased fitness for the sender.
Study 3- Social Preferences
• Hypothesis: Wearing a luxury brand will make the
sender more likely to be perceived as being suitable
for a job and deserving of a higher wage.
• Methods:
– Participant watched a video of a job interview with the
male interviewee wearing either no label or a Tommy
Hilfiger labeled shirt.
– Subject then had to rate them on their perceived
suitability for the job and what they believed the
interviewee should earn for the job. Also measured
perceived status, attractiveness, kindness and
trustworthiness of interviewee.
Study 3 Cont.
• Results:
– Participants in the brand label condition found the
applicant more suitable for the job on average.
– Also suggested the interviewee earn more money
when wearing a luxury brand.
– Brand label condition interviewee had higher average
status ratings than no-label interviewee. No difference
on other ratings.
• Main Point: luxury brands led to preferential
treatment in social interactions, specifically
regarding competitive opportunities.
Study 4- Charity Donations
Hypothesis: people are more likely to donate
real money to people wearing luxury brands
compared to people with no labels.
Methods:
- Confederate wearing a polo
either with a Lacoste logo or no
logo would go door to door in a
low SES neighborhood asking for
donations to the Dutch Heart
Foundation.
Study 4 Cont.
• Results: Donations to luxury brand
confederates were on average higher than
donations to no-label confederates.
• Main Point: luxury displays cause financially
beneficial treatment in real life conditions,
even when treatment is costly to the receiver
of the signal.
Study 5 & 6- Reliability of Costly Signaling
• Hypothesis: brand labels will only produce
preferential treatment in a social situation if they are
in fact known to be costly to the sender.
• Methods: Financial Interaction Game
• Situation where if they give their
partner a coin, he gets double the
amount. You can also decide to keep
your coins for their face value.
• Study 5: Luxury label vs. ordinary
label.
• Study 6: Incidental vs. Intentional
and luxury label vs. no label.
• In both situations a questionnaire
measuring status was given.
Study 5 & 6 Results
• Study 5- Transfers in the luxury label condition exceed
transfers in ordinary label condition
– Luxury label also received higher status ratings.
• Main Point- brand labels are perceived as costly signals and
result in status enhancement/ produce beneficial social
consequences only insofar as they are actually costly to
acquire.
• Study 6- Transfers to people wearing luxury brand labels
were higher if they were believed to own the shirt as opposed
to those believed to be asked to wear the shirt.
– No effect of perceived ownership in no-label condition.
• Main Point- Luxury labels only produce beneficial
consequences if they are seen to be a reliable indicator of the
status of the sender.
Study 7- Dictator Game
• Hypothesis: people partnered with luxury brands
will transfer more money than those partnered
with no-label partners.
• Methods:
– Same technical methods for viewing pictures and
allocating money to partner.
– Assigned a “dictator” role in the game where they
would decide how to distribute €10 between their
partner and themselves. Their fictitious partner had
no choice.
– Partner was either wearing a Lacoste polo in the
picture or the same polo with the logo removed.
Study 7 Cont.
• Results: people transferred more money in
luxury label condition than in no-label
condition.
• Main Point: Financial
benefits in social
situations are more likely
to be given to
conspicuous consumers
even when there is no
chance for reciprocity.
General Discussion
• Signal must be observable.
– In all studies, each person or picture was held constant across
conditions when only the presence of a label was different.
• Signals must be associated with a real cost so they
cannot be easily faked.
– Studies that compared ordinary labels and luxury labels still
found advantages with luxury labels showing that people
recognized the value of luxury labels over other cheaper labels.
Only worked when they were reliable indicators.
• Signal must be associated with an unobservable but
desirable individual quality.
– Perceptions of higher status and associated wealth were found
in all studies where questionnaires measuring perceptions of
personal qualities were given.
General Discussion
• Signal must ultimately yield a fitness benefit.
– In study 2, wearing luxury brands led to increased
likelihood of compliance when asking for a small favor.
– In study 3, wearing luxury brands increased
perceptions of suitability for a job and perceived as
deserving higher wages.
– In study 4, people were more likely to donate real
monetary benefits to people wearing luxury brands.
– In a social dilemma scenario, people were likely to
give more money to partners wearing luxury brands
than ordinary or no-label partners.
Limitations and Implications
• Use of more subjects from different cultures and lower SES.
• What are the specific characteristics of somebody with high
status that people find attractive? Further in-depth
questionnaires for future studies.
• Is their an observed sex difference? Who should be more
attracted to luxury brands?
• Are job selection procedures being biased by cues of status
rather than cues that reliably indicate relevant traits?
• Consumption may be a more effective way of
communicating traits than natural ways through
interpersonal communication.