Abstract
Consumer spending is an issue of great economic
interest because it is largely influential in the economic performance of
nations. There are factors that affect
the spending patterns of individuals with broad ones including a country’s GDP,
per capita income etc. On an individual level, different forces are responsible
for their patterns of spending. This study is an exploration of conspicuous
consumption, an economic ideology that illustrates spending lavishly with an
aim of outward show to others. Although
this spending is visible in many commodities, the fine arts, jewels and wines
forms a great portion of contemporary conspicuous consumption. Auctions on fine
arts and wines across the globe have become huge financial phenomena, an
indication that more consumers are engaging in huge spending on these items.
This study is an exploration of the extent of conspicuous consumption in fine
arts and wines, with specific reference to Asia Pacific markets which have
recorded a tremendous growth in the recent past. This proposal highlights the
literature background, methodology and ethical concerns taken into
consideration on the formulation of this research.
1.0 Introduction
to the Problem
The agenda of sustainable consumption has been an
important economics issue especially in the latter part of the 20th century and
the whole of the 21st century.
Since the industrialization age, populations in the developing and the
developed world’s have consistently pursued a higher standard of living
(Slater, 1997; Lury, 1996). The levels of standards of living today are much
higher compared to what they were a century ago, a pattern replicated all over
the world. This is a significant pointer to the fact that more people are now
enjoying higher standards of living than at any other time in history. The consequence of this rise in standards has
been a consistent rise in demands for luxury products such as bigger homes,
cars, exotic holidays, jewels, arts etc (Mason, 1998). In other words, there has been a gradual
shift by masses to lavish spending, which is economically referred to as
conspicuous consumption. Although there is scarcity of information on contemporary
statistics on arts consumption, there is a continuous rise in spending on arts
as portrayed by some of the great art exhibitors in the world. According to
Sotheby’s, art spending today is four times what it was in the 1990’s.
Additionally, Sotheby’s statistics show that the number of countries in which
clients came from has increased by 61% since 2007. In addition, over a period
of five years up to 2007, clients who purchased arts worth over $500,000 in
Sotheby’s increased by 238%. Another fact that is closely related to this
research is that 15 out of 35 most expensive modern artists in 2007 were from
China (Forrest, 2008; Sotheby, 2010)). As arts consumption goes high, there has
been a similar increase in wines spending in developed countries, with France,
Britain, Italy and US rated as the leading in wine consumption (Institute of
Alcohol Studies, 2010; PRNewswire, 2007). According to the US wine market
council president, the nation’s consumption of wine reached a tipping point in
2007 as reported by Heeger (2008). In that year, approximately 304 million
cases of the products were sold and consumed. The number of wine consumer had
also risen from 43% in 2000 to 57% in 2007 (Heeger, 2008). The statistics in
the US are replicated the world over with more and more consumer spending more
on fine arts and wines. This study will explore fine arts and wines consumption
through the guidance of the research questions highlighted later in this
proposal.
1.1 Purpose of
the Study
Conspicuous consumption is associated with the leisure
classes who have a consumer habit of buying highly conspicuous goods with an aim
of either advertising their wealth or attaining a certain social status
(Bagwell, & Bernheim, 1996). Such spending is regarded as prestigious on
the basis that it is not driven by basic needs recognized in economics as food,
clothing and shelter. Although leisure spending is recognized as an important
part of an individual’s social life, too much of it may exceed the relatively
normal limits of consumption. There has been a general increase over time on
the consumption on fine arts among the developed nations and the trend is
picking up in dynamic markets especially in Pacific Asia (Art Daily. Org. 2010;
Christie’s, 2010). The purpose of this study is founded therefore on assessing
the extent to which these products are marketed and consumed in such markets
and particularly explore the existence of a relationship between an increased consumption
of wines and fine arts. Information obtained in this study will act as a guide
on some of the parameters that promote conspicuous consumption.
1.3 Research
Objectives
The main objective of this research will be to
assess the prevalence of conspicuous consumption of fine arts and wine in Asian
markets. To effectively achieve this objective, the study will adopt a primary
research question which will be sued to guide the study analysis;
1.4 Research
Question
The focus of this research will be on conspicuous
consumption with a target analysis on fine arts and wines. The primary research
question to be adapted in this study hence will be;
- What is the extent of conspicuous consumption of fine arts and wines in Asia markets especially Hong Kong and Singapore?
To aid in widening the scope of the primary research
question, further specific questions will be adopted for analysis in this
study. The specific questions to be analyzed are as follows;
- What are the statistics on wine and fine arts consumption in Developed countries and medium developed countries especially China and Singapore?
- Is there a correlation between a country’s GDP and per capita income on consumption of fine arts and wines?
- How big is the conspicuous consumption market of fine arts and wine in Asia markets?
- What factors contribute to conspicuous consumption of fine arts and wines in Asian markets?
- What are the motivations behind purchasing lavish arts and wines?
- What is the future of fine arts and wines markets in China and Singapore?
1.5 Scope of the
study
The study will focus on Asian art and wine markets
for analysis. The reason this geographic zone has been selected is due to the
recent economic performance of the area in which more people are attaining
economic status that enables them to have expendable wealth. Besides that,
there has been a recent growth in fine
arts and wines markets with one of the biggest global art auction, ‘Christies’
auction held in Hong Kong being the second biggest in the world this year (Christie’s,
2010; ArtDaily.Org, 2010). Although the auction attracts shoppers from many parts
of the world, the significance interest among the locals shows that the area
has become highly feasible arts and wines consumption.
2.0 Literature
Background
Thorstein Veblen, an economist is credited with the
evolution of the term in the late stages of the 19th century when he
published a book, ‘theory of leisure class’ in 1899. He used the term to
describe lavish spending on products acquired consciously with an aim of
displaying wealth or income (Basmann, Molina & Slottje, 1988; Tierney,
1998).
A conspicuous consumer does not only spend but displays ones spending as a
psychological tool to attain or maintain a social status (Bruan & Wicklund,
1989). In the current world, conspicuous consumption is regarded as
antagonistic to sustainable spending since it increases use and associated
misuse of resources resulting to great environmental impact (Dubois &
Patrick, 1993; Publicservice.co.uk, 2008). Although the term was initially used
to describe the spending patterns of the upper class, it is now used averagely
to include households and individuals with expendable incomes and who engages
in consumption with an aim of showing or maintaining their status as opposed to
real need of the products (Charoenrook & Thakor, 2010). .
As early as 1899, Veblen had argued that the
presence of economic classes’ diversity in the society would have a bearing on
the way such people spent their incomes. In his argument, Veblen (1997, p. 1)
argues that the distinction of classes has been with the human race since its
genesis. In the developed countries, early segmentation of classes was evident
during the industrial age when the upper class was exempt from rigorous
industrial jobs but mainly occupied certain jobs to which a certain amount of
honor was attached.
There have been diverse efforts to explain the
motives behind conspicuous consumption. According to Postrel (2008),
conspicuous consumption in the US has a historical connotation. The Black
Americans and Latinos spend much of their in come on jewels and prestigious consumption,
a sign that observers argue has developed as a way of showing their emergence
from the earlier days of discrimination. As such, much of the spending is done
with a social motive of being seen by others who could either be in the same
economic class or different social groups. Postrel (2008) argues further that
this kind of consumption arises more where different classes have diverse economic
powers. In a society of equals, especially for those who are economically
empowered, the need for show off is diminished as each member of the society is
able to purchase most of the needed items.
During the earlier days of studies on conscious
consumption, the super class was viewed as the most likely to spend lavishly.
Current studies however points to a number of causes and motives that leads
individuals to spend with a motive of being seen by others. Looking at the
modern society in countries such as US, Britain, Australia etc, there is
actually more inclination that shows that the averagely less economically
powerful are more conspicuous consumers than the extremely rich (Creedy &
Slottje, 1991). A study conducted by Sivanathan and Pettit (2010) explored some
of the reasons behind conspicuous spending.
Individuals are likely to purchase high-status products
if their egos are threatened. The products in this case acts as psychological boosters
to their psychological pain inflicted either by their weaknesses or by an
extremely powerful competitor. When
lavish spending is motivated by this reason, it may recede if the individuals
get other substitutes that can alleviate their psychological pain.
Earlier studies had also shown that people can
engage in conspicuous consumption with an aim of asserting their social status
(Cosgrove-Mather, 2006). Traditional rulers in monarchies and chieftainship
engaged in lavish consumption as a symbol of their status in the society. The
traditional tools that have been used as status symbols include jewels, luxury
cars, jets, yachts etc. In the contemporary world, there is substantial
spending on arts and wines, commodities that do not fall under the economics
category of basic wants. This study will explore the consumption of these
products.
3.0 Research
Methodology
This section details the modalities used by the
researcher in collecting data necessary for analysis of the research questions
identified. The method adopted in data
collection should be one that supplies the most reliable and valid data that
can add validity and reliability to the results. The main objective of this
study is to collect reliable data that will act as a reliable base for interpreting
conspicuous consumption evident in the consumption of wines and fine arts. To
facilitate this, the study will adopt a primary research approach with a substantial
reliance on secondary materials. Primary
research is one in which the researcher gets original data about the question
of study either from filed study or through the utilization of respondents
deemed as experienced in the field of study.
A primary research is fundamentally adopted in this study for a number
of reasons. First, it will allow the researcher to obtain information that is
tailored to meet the requirements of the research question. Secondly, direct access of primary research
resources places the researcher in a vantage position of observing respondents
and applying already existing body of knowledge in interpreting their responses.
Saris and Gallhofer (2007) argues that primary research is advantageous in that
it helps the researcher interact with real information on the ground and
therefore enrich the process of data interpretation. Other advantages that were considered in
adopting this method in the research include the fact that primary research is;
- Up to date- the data collected is in real time and is provided by real respondents at the current time.
- Specific to the purpose- By structuring the data collection method effectively, the researcher is able to obtain information that is customized to specific questions and issues.
- The in formation collected is confidential- through ethical guidance to research, the researcher is able to safeguard the information collected since there are no third parties relied upon (Creswell, 1994).
- It is relatively time saving where the researcher adopts modalities such as telephone interviews and online questionnaires.
Through consideration of the benefit inherent in
this mode of research, the method adopted for data collection in this research
is the use of live interviews. The researcher deemed it appropriate to use
interviews on the basis that a number of respondents on trading wines and fine
arts would be accessible. Unlike in other methods of primary research, live
interviews would present the researcher with more advantages on top of those
that are general to primary research. Bryman and Bell (2003) points out that
interview in business research are useful in a number of ways. First, they
assist a researcher to investigate a study issue in an in-depth modality. It
also helps the researcher to obtain first hand information on the way
respondents in the area of study feel and think on a certain issue through the opinions
they express. Another fundamental use of interviews is that they put a human
dimension to physical and impersonal data.
Through interaction with respondents already experienced in the field
being examined, an interview guides the researcher in making decisions and
adopting a best strategy in obtaining the most relevant data. In addition, use
of interviews helps respondents to share information that they would otherwise
find it hard to share in collective groups. The usefulness of interviews in
research is appropriate for this study and according to the researcher analysis;
the interviews will be beneficial in this study in a number of ways;
- They will assist in obtaining detailed information- respondents in interviews use physical gestures and facial expressions that adds meaning to the data which may be unavailable in other methods (Miles, 1994).
- Assist in asking more detailed questions
- The researcher can help interpret questions that respondents may find hard to interpret in other methods (Patton, 1987; Creswell, 1994)
- Interviewing will help clarify any ambiguity in the research questions.
To add value in the data obtained through the
interviews, the researcher will rely on established literature sources to gauge
the authenticity of the information obtained. Such information will be sourced
from authentic sources including journals, books and e-books, established
leisure books on arts etc. By relying on extra literature resources, the
researcher is confident to present data that will be valid and useful in making
inferences in this study.
3.1 Interview
schedule
The validity of data on the research questions is
based on interviewing reliable respondents who have dealings and experience in
the field of fine arts and wines trade. As such, the researcher has approached six
respondents for interviews as follows;
- One wine auctioneer based in Singapore
- Five art collectors who have exhibited their arts this year.
The researcher is in contact with the target
respondents who have expressed willingness to participate in the interviews.
4.0 Reflection
on Limitations
The researcher is conscious of a number of
limitations that may come in the way of collecting data necessary in this
research. First, the issue of access to the respondents is of major concern.
Despite the respondents’ willingness to participate in the interviews, their
availability may be limited due to their busy schedules and business demand. To
overcome this limitation, the researcher has in place resources to do online
interviews through web teleconferencing should physical availability become an
impediment. As pointed by Corbin and Anselm (1990), bias in research also acts
as a limitation due to the researcher’s expectations and past knowledge. The researcher is focused on relying on data
collected as the primary point of reference in making analysis to improve the
reliability of the research. Where necessary, data obtained from respondents
will be quoted in the research to ensure that only primary data is relied upon
in making analysis.
5.0 Ethical
Concerns in the Research
As a requirement to outline efforts on ensuring
ethical standards of contemporary research, the researcher has put in place the
following principles. First, respondents approached were informed of the right
to voluntary participation. This was to avoid the possibility of coercion into
data provision. Secondly, the respondents were formally informed of the
procedure of conducting the research including the possibility of any risk to
their participation. To ensure that respondents’ confidentiality was observed,
the researcher informed the respondents that their identities would be
concealed to ensure anonymity. Through these measures, the researcher is
confident that their participation in this research would be voluntary and with
no fear of reprisals. The researcher will also avail a copy of the research to
the respondents before submission for them to validate the truth of data collected.
6.0 Conclusion
This research will be guided by established body of
literature in conducting a primary research. Through the data collected, the
researcher will do analysis and make inferences-as-per data to ensure validity
of the research. Since the respondents targeted in the research are in fine
arts and wine trade, the researcher is confident of collecting reliable data
that will assist in developing a valid analysis. After receiving feedback from
the university on this proposal, the researcher will organize the interview
schedules which will guide analysis on the issue of conspicuous consumption in
fine arts and wines.
For more theory and case studies on: http://expertresearchers.blogspot.com/
For more theory and case studies on: http://expertresearchers.blogspot.com/
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