Veblen good
Also known as: Conspicuous consumption
A good people want more of precisely because it is expensive.
What it means
A category of luxury good for which demand rises as the price rises, violating the usual law of demand, because the high price is itself the source of prestige and status the buyer seeks. The good functions as a signal of wealth and exclusivity, so lowering its price would undercut the very 'conspicuous consumption' that makes it desirable. It is closely related to, but distinct from, the price-quality heuristic and snob effects, and it underlies the strategy of luxury brands that protect prices and limit supply. It matters as a vivid case where price drives desire rather than the reverse.
Examples
A designer handbag becomes more coveted after a price hike, because owning it signals status.
Two identical bottles of wine sit on a shelf at 15 and 60 pounds; guests bring the 60-pound one precisely because the host will see what it cost.
A members' club raises its joining fee and the waiting list grows — the fee is the point, because a club anyone can afford signals nothing.
First described in Thorstein Veblen (1899); Leibenstein (1950).