Why Living Near Rich People Might Make You Overspend on Luxe Labels

A woman wearing David Yurman jewelry. Photo: Getty

Are you a status junkie, obsessed with luxury labels like Ralph Lauren or David Yurman? Chances are you live in an area of high income inequality, at least according to a study published last month in the journal Psychological Science.

In the course of the study, researchers tracked the states with the highest income inequality. Perhaps unsurprisingly the list of the most unequal states skewed towards the East Coast, and included New York and Connecticut; Alabama and Mississippi also ranked highly.

The study then selected for a number of Google search terms in those states and found that in unequal states, frequent “search terms included luxury brands (e.g., ‘Ralph Lauren,’ ‘David Yurman jewelry’) and material possessions such as furniture, jewelry, and shoes,” whereas in states with relative equality, searches tended to focus on non-statusy items like “‘lemon bars recipe’ or ‘chick flick movies.’”

It’s not a great leap to imagine that wealthy New Yorkers, say, would be looking for luxury items online, but what’s interesting about the study is that it also points to a “Keeping up with the Joneses” mentality in unequal states, where even those with far less money than the one percenters are also concerned with high-status clothing and objects. According to the researchers, “income inequality increases the general consumption of middle-income households, even after controlling for those households’ own income.”

What that means is that everyone who lives in an area of income disparity feels the pressure to telegraph their status, even if it means maxing of the credit card. The scientists posit that all this spending isn’t actually making people happy, since spending above their means can translate into rock bottom savings, longer work hours, and a general sense of economic uncertainty for average consumers.

Moral of the story? Time to distract yourself from the wantsies by getting back baking or watching 27 Dresses for the 149th time, apparently. Or to figure out a way to actually afford those Yurman baubles.

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