Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
A new study finds that more people search online for luxury goods in states with higher income gaps.
The “social rank” theory says people use status goods to project their wealth: Louis Vuitton bags, say, or Cartier watches. According to this school of thought, that tendency should be even greater in places with lots of income inequality, where visible signs of wealth might serve as louder status signals. A new study, published in the journal Psychological Science, tests whether Americans react to inequality this way by examining what they search for on the Internet.
"We're not looking at what people actually purchase, but what they spend time looking for information about," says psychologist Lukasz Walasek of the University of Warwick, who co-authored the study.
To test the hypothesis, Walasek and his colleagues used Google Correlate to find the most frequently searched terms by state. Then they asked an independent panel to rate whether or not these terms signaled high social status. That was indeed the case, they report:
Search terms that occur with relatively higher frequency in states with greater residual income inequality are more likely to concern status goods—designer brands, expensive jewelry, and so forth—than nonstatus goods.
In other words, in states with higher inequality, a majority of the frequently searched terms tended to be status-related. "Ralph Lauren Mens," "fur vests," and "Yurman Rings," for example, were all terms positively correlated with income inequality, whereas terms like "chicken bake," and "flower names" were not.
On the basis of these results, the researchers created state heat maps to show income inequality as well as its correlation with status search terms. The redder states, like Louisiana, had higher income inequality (below, top) as well as higher levels of correlation with search terms like "Ralph Lauren" (bottom left) and "fur vests" (bottom right):
One limitation of the analysis is that it doesn't tell us to what extent the super-rich in these states might drive searches for luxury items. Walasek feels it's unlikely they do, given the range and type of data: Google Correlate analyzed millions of Internet queries before narrowing down the 100 most frequent ones by state. Still, the researchers are planning to test that relationship in further research.
Walasek hopes that, in its current form, the study illuminates how the preoccupation with status in unequal states wastes time and energy that could be used more productively.
"There are better ways to increase your social status such as earning more money, accumulating more wealth, and saving more money—rather than keeping up with the Joneses," he says.