Impact of Psychological Needs on Luxury Consumption

Abstract

This paper examines the impact of psychological needs on luxury consumption. Veblen’s Theory of the Leisure Class (1899) invented the term “conspicuous consumption” to describe luxury goods and services, in which Veblen indicated the purpose of luxury consumption was to display wealth and social status. This paper integrates the following two papers: (1) Han and Zhou (2002), who proposed an integrative model, and argued that three variables, namely Country-of-Origin, Brand Name, and Price, were major predictors for overall product evaluation and purchase intentions; and (2) Han, Nunes and Dreze (2010), who proposed a taxonomy called The Luxury 4Ps, to explain the inductive and deductive psychological needs of luxury consumption.