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Why Do Poor People 'Waste' Money On Luxury Goods? - "If you are poor, why do you spend money on useless status symbols like handbags and belts and clothes and shoes and televisions and cars? One thing I've learned is that one person's illogical belief is another person's survival skill. And nothing is more logical than trying to survive."
Anecdata is so seductive. Especially when trying to defend a "minority"
Keywords: survival strategy, poor, survival strategies
A new way of looking at race and conspicuous consumption. - "Do blacks actually spend more on consumerist indulgences than whites? And if so, what, exactly, makes black Americans more vulnerable to the allure of these luxury goods? Economists Kerwin Charles, Erik Hurst, and Nikolai Roussanov have taken up this rather sensitive question in a recent unpublished study, "Conspicuous Consumption and Race." Using data from the Consumer Expenditure Survey for 1986-2002, they find that blacks and Hispanics indeed spend more than whites with comparable incomes on what the authors classify as "visible goods" (clothes, cars, and jewelry). A lot more, in fact—up to an additional 30 percent. The authors provide evidence, however, that this is not because of some inherent weakness on the part of blacks and Hispanics. The disparity, they suggest, is related to the way that all people—black, Hispanic, and white—strive for social status within their respective communities... blacks and whites are seeking status in different communities. In the racially divided society we live in, whites are trying to impress other whites, and blacks are trying to impress other blacks. But because poor blacks are more likely to live among other poor blacks than poor whites are to live among other poor whites, poor black families are more susceptible to being pulled into a signaling game with their neighbors... the authors look at how much a white family spends on conspicuous consumption when it is surrounded by white families making a similar amount of money. They find that this white family spends the same portion of its income on visible goods as a black family surrounded by other black families with similar incomes. They also find that the further a family of either race slips behind the average income of nearby households of the same race (becoming too poor to compete in the signaling game), the less it spends on these visible goods... black households spend more than 50 percent less on health care than whites of comparable incomes and 20 percent less on education"
If it were really a survival skill the richer your neighbours are the more likely you'd be to buy luxury goods
Presumably it is not a survival skill to spend on education and healthcare
Study: Low Self-Esteem Makes You More Likely to Buy Luxury Goods - "Sivanathan and Pettit hoped to explain why it is that poor people tend to spend a proportionally larger amount of their income on status purchases compared to folks who are well off. (Granted, low-income families a lot less money to begin with.) Through a series of studies, the researchers came to the conclusion that we consume not only to create some impressive exterior, but also to alleviate interior psychological pain—in other words, to make you feel better when you’re down in the dumps."
Improving self-esteem is a survival skill
Study: Higher Income Inequality Correlates With Luxury Consumerism - "The first study “found a link between lower household income, relative to one’s neighbors, and the purchase of ‘high-status cars,’ along with riskier portfolios and higher levels of debt.” The second, a psychology study, was a bit more complicated. It found that in states with higher levels of income inequality, more people Google luxurious brands—Ralph Lauren, David Yurman—and items such as furniture and shoes. In states with lower levels of income inequality, search terms like "chicken bake," "lemon bars recipe" and "chick flick movies" were more common."
Maybe a risky portfolio and high level of debt are survival skills
‘CONSPICUOUS CONSUMPTION’ KEEPS PEOPLE LOCKED IN POVERTY - "poor families around the world – those living on less than $2 a day – spend much of their income on goods that do not appear to alleviate poverty. For example, the average spending on festivals is as high as 15% of income in some regions of India. Similarly, South Africans spend on average a year’s income on an adult’s funeral, often financed by borrowing... Moav and Neeman propose that people care about their economic status and try to signal their income through conspicuous consumption. The analysis shows that if human capital is somewhat observable and correlated with income, then an unfortunate outcome driven by ‘signalling’ can emerge, in which poor individuals spend a large fraction of their income on conspicuous consumption. In particular, individuals with high human capital have a recognisable earning ability – professional titles, degree certificates, prestigious jobs, etc. – and relatively little need to signal success. In contrast, those without certified accomplishments have a relatively stronger motivation to impress via conspicuous consumption. As a result, the fraction of income allocated to conspicuous consumption can decline as the level of human capital rises – and the income allocated to savings and education can increase. Thus, the analysis predicts that among poor families with low levels of education, there will be low saving rates and low investment in the future – particularly in children’s education."
The Economics of Boasting - "why do humans want to appear richer than they actually are? Evidence points at an evolutionary advantage, as command over resources seems to contribute to the sexual attractiveness of a person (in particular of males, who, for evolutionary reasons not to be discussed here, compete more fiercely for mating partners than females). It has been shown, for example, that the relationship status is a reliable predictor for the extent of a man’s conspicuous consumption – single men buy more expensive smartphones and cars than those who are married (e.g. Hennighausen and Schwab (2014): “Relationship Status Moderates Men’s Conspicuous Consumption of Smartphones”, Letters on Evolutionary Behavioral Science 5, pp. 13-16). Like male peacocks, whose lavish plumage indicates to females that their reproductive resources are so abundant that they can afford to have highly visible (and therefore risky), resource-intensive, and even obstructive feather coats, a human male who buys a Rolex shows to human females that he is so rich that he can afford to buy a watch for several thousand dollars which essentially yields the same utility as a $20 watch. Paradoxically, conspicuous consumption seems to be more frequent in poorer societies. Moav and Neeman accumulated a lot of evidence for this (detailed sources can be found in their paper): median spending on festivals comprises about 10-15% of annual income in rural India, and Black households in South Africa spend on average a year’s income on an adult’s funeral. At the same time, they typically spend less than 1% of their income on less transparent forms of entertainment like movie theaters. A New York Times article describes the case of a poor Indian farmer who sold his land for $109,000 and then rented a helicopter for $8,327 to fly his son two miles to his wedding party.The explanation given by Charles, Hurst, and Roussanov (2009) is that conspicuous consumption is more effective in a society of poor people (“Conspicuous Consumption and Race”, Quarterly Journal of Economics 124, pp. 425-67)... a veritable poverty trap can arise from conspicuous consumption. The first problem is that conspicuous consumption competes with more useful expenditures, say, like saving for one’s retirement or the education of children: “The very poor spend only 2-3% of their income on their children’s education, do not eat well, experience ill health, and report that they are worried and anxious to an extent that interferes with their sleep and work. In many cases, they fail to make trivial investments in their business and save so little that they cannot avoid cutting back on meals when they suffer a temporary decline in income.” The second problem, according to Moav and Neeman, is that conspicuous consumption becomes more important the less human capital a person has acquired. Having a degree or a title is a strong signal about one’s income and reduces the necessity to buy, say, a Mercedes Cabrio.A vicious cycle may be the result: when people or societies get poorer, they expend more on conspicuous consumption and less on the education of their children"
So much for conspicuous consumption being a survival strategy for the poor
(PDF) Saving Rates and Poverty: The Role of Conspicuous Consumption and Human Capital - "Poor families around the world spend a large fraction of their income consuming goods that do not appear to alleviate poverty, while saving at low rates. We suggest that individuals care about economic status and hence we interpret this behavior as conspic-uous consumption that is intended to provide a signal about unobserved income. We show that if human capital is observable and provides some information about income, a signaling equilibrium can emerge in which expected expenditure on conspicuous con-sumption as a fraction of total income is decreasing with income. This equilibrium results in an increasing marginal propensity to save that might generate a poverty trap."
China Just Launched the Most Frightening Game Ever — and Soon It Will Be Mandatory - "As if further proof were needed Orwell’s dystopia is now upon us, China has now gamified obedience to the State. Though that is every bit as creepily terrifying as it sounds, citizens may still choose whether or not they wish to opt-in — that is, until the program becomes compulsory in 2020. “Going under the innocuous name of ‘Sesame Credit,’ China has created a score for how good a citizen you are,” explains Extra Credits’ video about the program. “The owners of China’s largest social networks have partnered with the government to create something akin to the U.S. credit score — but, instead of measuring how regularly you pay your bills, it measures how obediently you follow the party line.”"
Episode 15: The Two Singapores - "In Singapore, the trend had been towards greater labour peace, but the MCP could not be permitted to use it as a base. The Emergency Regulations were extended to Singapore a week later. Troops were despatched to the streets. The Emergency Regulations empowered the government to detain without trial, ban publications, take possession of any building or vehicle, control all road movements, disperse any meeting, impose curfews, arrest anybody without a warrant, impose the death penalty for possession of arms, punish anyone suspected of disseminating false information, confiscate businesses suspected of aiding the MCP, detain anyone suspected of aiding or consorting with the MCP, use all force necessary to arrest persons carrying firearms or suspected of consorting with people who did, and evict persons occupying state land. These measures were draconian, suspending the normal rules of government, the normal rights of the people. They gave the government unprecedented power over the people, and so they were meant to be strictly temporary, purely for a state of emergency. Unfortunately, many of these laws are still with us today. Power, once seized by a government, is very hard to relinquish. The Emergency Regulations were strictly temporary measures meant to combat a temporary enemy. This enemy has long been defeated. This enemy never had much of a foothold in Singapore to begin with. Yet these Regulations still exist, brought back under different names. Most famously, the power to detain without trial was converted in 1955 to the Preservation of Public Security Ordinance, then after merger into the Internal Security Act."
Episode 16: The Crowdfunded University - "If language and knowledge were not inextricably intertwined, why did the British educational system continue treating them with such respect? Why was Latin still taught in schools and why was knowing Latin a requirement to get into university? To this day in December 2015, knowing Latin is still technically a requirement for getting into the University of Oxford. The newspapers argued that education could never turn a person into another ethnicity. It would just leave a person bereft, without any identity. A Chinese person would never be accepted as a Malay, or an Indian, or an Englishman, no matter how well they assimilated. Sir Tan Cheng Lock said, “If a Chinese knows nothing about Chinese education, philosophy, habits and customs and religions, then he or she is not a Chinese, neither can he be a Malayan, an Indian or an Englishman. He is only a scoundrel.”
Episode 6: Modernist Islam, Malay Islam, and Malayan Nationalism - "[On Arab and Indian Muslims] What I found was that they tend to code switch... when it came to talking to, about Singaporean or Malayan politics they would identify themselves as Malays. They would usually be the representative of the Malay community anyways. So they didn't even have to assert that so much sometimes. And then when it came to dealing with their fellow Arabs or Indians they would identify as Arabs and Indians. And so on and so forth... I didn't see a shift. They would identify as both at the same time. They would identify as Malay and also as Arabs... all at the same time, depending on who they were talking to"
Episode 13: The Yellow Lion and the Red Sun - "The second and arguably more important consequence of the Japanese occupation was to accelerate long-standing communal trends. To exacerbate longstanding communal divisions. To catalyse the politicisation of Singapore and in particular of its three major communities, firing up new political agendas among the Indians and Malays. Turning the Chinese into a bitter, angry frustrated community, setting the communities against each other. And indeed this conflict would turn hot immediately after the Japanese surrender in 1945. Before the British returned, Chinese resistance groups violently punished suspected Japanese collaborators, who were chiefly Malay. And Malays responded with bloody reprisals on the Chinese. And this unfotunately set the stage for the independence movement, which began when the British returned to a Malaya that no longer wanted them"
Republican says men should be allowed to grab women's nipples if they are breastfeeding in public
Equality means being able to grab everyone's nipples
Cologne Rapefest: The Top Five Best Liberal Excuses... - "1. It was a false flag operation designed to discredit innocent lovely immigrants
2. You can’t talk about these things because it encourages the ‘Far Right’
3. Rape is only a ‘thing’ when white people do it
5. Nothing to do with Islam. It’s because all men are rapists, obviously"
Germans clash over ‘rapefugees’ who carried out mass sex attack - "In Cologne, a police report kept under wraps for days described women having to “run a gantlet” of drunken, abusive “Arab and North African” men in the square bounded by the Cologne Cathedral, one of Germany’s best-known Christian symbols, and its modernist glass Central Station. The New Year’s crowd, at least 1,000 strong, massively outnumbered the police on patrol in the square, leaving cops helpless to counter at least two rapes and other brutal attacks from those who allegedly burned women with firecrackers, reached under their skirts to grope them, grabbed their breasts, tore off their undergarments, and screamed obscenities. Saturday’s heavy police presence in the square was in stark contrast to the meager forces in place on New Year’s Eve, protesters on both sides said. “The police come after us but they don’t dare touch the Syrians,” one anti-Merkel activist complained"
Merkel gets tough on migrant lawbreakers as Cologne assaults soar - "Of the cases reported so far, 40 percent related to sexual violence, Cologne police said in a statement. "Those in focus of criminal police investigations are mostly people from North African countries. The majority of them are asylum seekers and people who are in Germany illegally," police added, confirming witness accounts... On Friday, the interior ministry said Germany's federal police had identified 32 suspects, 22 of whom were asylum seekers, in connection with 76 offences, 12 of which had a sexual nature."
A girl narrates a letter to her dad as she grows up, and it makes rape culture obvious. - "A new society that is as safe for women as it is for men is possible. But everyone has to work together to make it happen. Dads everywhere need to see this. Daughters everywhere need to see this. But so do sons and mothers. Make sure they do."
I would be very worried if the world were "as safe for women as it is for men". For one, it would require us to kill twice as many women through injuries and violence
Japan Keeps The Defunct Kami-Shirataki Train Station Open for Just One High-School Girl - "People are tipping their hats to the Japanese government for making education a top priority. “Why should I not want to die for a country like this when the government is ready to go an extra mile just for me,” one commenter wrote on CCTV’s Facebook page. “This is the meaning of good governance penetrating right to the grassroot level. Every citizen matters. No Child left behind!”"
Alaska's 'bridge to nowhere' plan finally scrapped - "A proposed Alaska bridge that became a symbol of wasteful federal spending on politicians' pet projects has officially been scrapped a decade after the idea was first floated, state officials said on Friday. Dubbed the "bridge to nowhere," it would have connected the small city of Ketchikan to its airport on nearby Gravina island, and it secured a $223 million earmark in 2005... Earmarks of nearly $450 million to help finance two proposed bridges produced cries of outrage from opponents who saw the them as exemplifying federal waste"
Why are people not tipping their hats to the Alaskan government?
VR porn is here and it's scary how realistic it is
Star Wars character Rey to be included in themed Monopoly game after 8yo girl writes letter to Hasbro - "The company faced criticism earlier this week after it was revealed that the four characters included in the game — Finn, Luke Skywalker, Kylo Ren and Darth Vader — were all male... Hasbro spokeswoman Julie Duffy said Rey had been left out of the game to avoid spoilers for the film, which was released months after the game hit shelves. It is not the first time fans have voiced their criticism on social media that Rey was left out of box sets and toys. A six-piece box set sold by Target in America and featuring Finn, Chewbacca, Poe Dameron, Kylo Ren, an unnamed stormtrooper and an unnamed TIE fighter pilot was the first to draw the ire of fans, who used the hashtag #WheresRey to question the omission. Fans said that leaving out Rey and replacing her with two generic male characters raised questions about the representation of female characters in the action movie world"
If there's no Han Solo why are people upset there's no Rey?