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Luxury Fever: Why Money Fails to Satisfy In An Era of Excess
Luxury Fever: Why Money Fails to Satisfy in an Era of Excess is a serious examination of the long-term costs associated with our society's ever-accelerating spiral of conspicuous consumption, followed by a far-reaching remedy that will intrigue anyone concerned with related fiscal issues. Robert Frank, a Cornell University professor of economics, ethics, and public policy, who previously coauthored The Winner-Take-All Society, believes neither foolishness nor greed is really responsible for our relentless desire to own flashier household appliances, bigger sport-utility vehicles, and fancier suburban houses; rather, he contends, it is the ongoing behavior of our peers which ultimately determines how much we spend and how we spend it. Frank goes on to claim, however, that this knowledge alone may actually point us toward an alternative that is both acceptable and practical. "By a simple and easily achieved rearrangement of our current consumption incentives," he writes, "we can effectively enrich ourselves by literally trillions of dollars a year." He then goes on to discuss the recent boom in luxury spending, its potential implications for those at all income levels, his suggestions for altering current consumption patterns, and the reasons that redirecting these funds could benefit everyone. --Howard Rothman
344 pages, Kindle Edition
First published January 1, 1999
20 people are currently reading
836 people want to read
About the author
Robert H. Frank
102 books184 followersRobert H. Frank is the Henrietta Johnson Louis Professor of Management and a Professor of Economics at Cornell University's S.C. Johnson Graduate School of Management. He contributes to the "Economic View" column, which appears every fifth Sunday in The New York Times.
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Displaying 1 - 18 of 18 reviews
March 25, 2011
I read this book back at Cornell, and it was a real epiphany book for me at the time. It shaped my perspective on how to look at the inequalities around us. I enjoyed reading an economics book as pleasant as a novel. It left me with much to think about and share.
to-keep-reference
June 9, 2023Citado en Desigualdad Pág.91
Frank used the same approach to understand another kind of irrationality: the vigor with which people pursue many goals that work against their own happiness. Frank begins with the question of why, as nations rise in wealth, their citizens become no happier, and he considers the possibility that once basic needs are met, money simply cannot buy additional happiness. After a careful review of the evidence, however, Frank concludes that those who think money can’t buy happiness just don't know where to shop. Some purchases are much less subject to the adaptation principle. Frank wants to know why people are so devoted to spending money on luxuries and other goods, to which they adapt completely, rather than on things that would make them lastingly happier. For example, people would be happier and healthier if they took more time off and “spent” it with their family and friends, yet America has long been heading in the opposite direction. People would be happier if they reduced their commuting time, even if it meant living in smaller houses, yet American trends are toward ever larger houses and ever longer commutes. People would be happier and healthier if they took longer vacations, even if that meant earning less, yet vacation times are shrinking in the United States, and in Europe as well. People would be happier, and in the long run wealthier, if they bought basic, functional appliances, automobiles, and wristwatches, and invested the money they saved for future consumption; yet, Americans in particular spend almost everything they have—and sometimes more—on goods for present consumption, often paying a large premium for designer names and superfluous features.
The Happiness Hypothesis Pág.98-99
Usado también en el curso La izquierda darwiniana de Daguerre.
Frank used the same approach to understand another kind of irrationality: the vigor with which people pursue many goals that work against their own happiness. Frank begins with the question of why, as nations rise in wealth, their citizens become no happier, and he considers the possibility that once basic needs are met, money simply cannot buy additional happiness. After a careful review of the evidence, however, Frank concludes that those who think money can’t buy happiness just don't know where to shop. Some purchases are much less subject to the adaptation principle. Frank wants to know why people are so devoted to spending money on luxuries and other goods, to which they adapt completely, rather than on things that would make them lastingly happier. For example, people would be happier and healthier if they took more time off and “spent” it with their family and friends, yet America has long been heading in the opposite direction. People would be happier if they reduced their commuting time, even if it meant living in smaller houses, yet American trends are toward ever larger houses and ever longer commutes. People would be happier and healthier if they took longer vacations, even if that meant earning less, yet vacation times are shrinking in the United States, and in Europe as well. People would be happier, and in the long run wealthier, if they bought basic, functional appliances, automobiles, and wristwatches, and invested the money they saved for future consumption; yet, Americans in particular spend almost everything they have—and sometimes more—on goods for present consumption, often paying a large premium for designer names and superfluous features.
The Happiness Hypothesis Pág.98-99
Usado también en el curso La izquierda darwiniana de Daguerre.
October 20, 2021
I agree with the author's view , we have to do something towards redirecting the individual's conduct which is destroying the self , society , well-being , life . Life is more precious than being too materialistic . There is also a long - run solution , rebuilding the individual's personality through giving more attention to pre-school stage .
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November 17, 2024Economist Robert H. Frank explains the reasons why people waste more than necessary on luxury consumption, the harms of this and how a progressive consumption tax could fix the problem. Unfortunately, a quarter century later it seems this idea has not been implemented and society still wastes large amounts of its wealth on conspicuous consumption.
March 1, 2025
Thought the first part about price inflations was interesting. It laid the problem of overconsumption out well. The second part recommending a national sales tax was a little too much for me. I can see how it might help reduce price increases, but the author claims it would be an easy implementation and that is too detached from reality for me.
November 29, 2020
I liked the first half of the book. The luxury spending depends on the context and relative position.
December 10, 2023
Somehow disappointing, it raises some interesting questions but leaves many unanswered. It is much focused on the US reality.
April 15, 2013
Robert H. Frank, Big Houses, & Happiness. All our stuff. We have bunches of it. Stuff here, stuff there, stuff everywhere. We need a place to put all that stuff, don't we? So buy a big house to put it all in. Suppose you do want to buy a house, and suppose its square feet have an impact on public policy. Public policy and big houses?, you ask. What's that have to do with anything? Think about this, then. Here are some interesting scenarios, each with implications for the environment and public happiness:
Robert H. Frank casts an interesting light on the subject. He offers two scenarios, one with a people living in 4000 square foot homes, totally isolated from another people living in 3000 square foot homes. He calls each Society A and Society B. Because separated from one another, each people is equally satisfied and does not question the square-footage norm. Further, the larger houses do not provide advantage in terms of longevity or health.
He observes that "it takes real resources to build larger houses." The difference between 3000 and 4000 square feet implies a difference in resources. His question: "Are there alternative ways of spending these resources that could have produced lasting gains in human welfare?"
Society B (smaller home) residents use saved resources for the commonweal. They spend the money and material to promote specific changes in their living conditions. ". . . cost savings from building smaller houses are sufficient to fund not only the construction of high-speed public transit, but also to make the added flexibility of the automobile available on an as-needed basis." (Frank) In short, they don't need a car but can drive it if they want to. They simply don't have one thousand additional feet of floor space.
Because all income goes toward stuff, Society A residents have no excess resources for improvement of their situation. They cannot fund pubic transit and must depend on the automobile. Their cars continue to cause traffic gridlock and high stress levels. Although nicer to live in, is the larger home more valuable in the context of longer commute times, traffic jams, and traffic noise?
These are factors demonstrably correlated to reduction in happiness. When a new, noisy highway was opened, people living next it were studied. Shortly after its opening, 21 percent said the noise did not bother them; a year later, the figure dropped to 16 percent. Prolonged exposure to noise elevates blood pressure lastingly. Auto commuters are subject to various noises. Things are out of their control. They cannot predict bottlenecks or accidents. They get cut off by drivers even more tense. "A large scientific study documents a multitude of stress symptoms" from daily commuting. The stress is known "to suppress immune function and shorten longevity." (Frank) This is aside from the risk of accidents or the inhalation of carcinogenic exhaust fumes.
Frank points out that a rational person would choose Society B in order to promote his own happiness. Rational. Research in cognitive psychology demonstrates people are anything but that.
Robert H. Frank casts an interesting light on the subject. He offers two scenarios, one with a people living in 4000 square foot homes, totally isolated from another people living in 3000 square foot homes. He calls each Society A and Society B. Because separated from one another, each people is equally satisfied and does not question the square-footage norm. Further, the larger houses do not provide advantage in terms of longevity or health.
He observes that "it takes real resources to build larger houses." The difference between 3000 and 4000 square feet implies a difference in resources. His question: "Are there alternative ways of spending these resources that could have produced lasting gains in human welfare?"
Society B (smaller home) residents use saved resources for the commonweal. They spend the money and material to promote specific changes in their living conditions. ". . . cost savings from building smaller houses are sufficient to fund not only the construction of high-speed public transit, but also to make the added flexibility of the automobile available on an as-needed basis." (Frank) In short, they don't need a car but can drive it if they want to. They simply don't have one thousand additional feet of floor space.
Because all income goes toward stuff, Society A residents have no excess resources for improvement of their situation. They cannot fund pubic transit and must depend on the automobile. Their cars continue to cause traffic gridlock and high stress levels. Although nicer to live in, is the larger home more valuable in the context of longer commute times, traffic jams, and traffic noise?
These are factors demonstrably correlated to reduction in happiness. When a new, noisy highway was opened, people living next it were studied. Shortly after its opening, 21 percent said the noise did not bother them; a year later, the figure dropped to 16 percent. Prolonged exposure to noise elevates blood pressure lastingly. Auto commuters are subject to various noises. Things are out of their control. They cannot predict bottlenecks or accidents. They get cut off by drivers even more tense. "A large scientific study documents a multitude of stress symptoms" from daily commuting. The stress is known "to suppress immune function and shorten longevity." (Frank) This is aside from the risk of accidents or the inhalation of carcinogenic exhaust fumes.
Frank points out that a rational person would choose Society B in order to promote his own happiness. Rational. Research in cognitive psychology demonstrates people are anything but that.
March 1, 2017
Interesting and interdisciplinary use of information to make compelling points and provide viable solutions to current problems!
November 16, 2013
I read the original version of this book. Sobering to read about serious inequality, the loss of smart people to the teaching profession in part because of low pay and a stymied Congress--as problems that have surely reached a crisis point--in 1999!
Amazingly, as recently as 1999, individual savings were important to the economy because they created money that could be leant--even if the money was then repeatedly leant out with only a minimal reserve to, in effect, create more money.
Now, however, we have simply passed over this step with the Federal Reserve simply printing money for us. Now why should people save? There is no interest return, we can take our chances in the stock market but only the big guys can really operate there and then only if they have the fastest machines to get their trades before everyone else. Looking at the info in this book from 2013, and its clear that all the main thing the masses are good for in the economy, now, is to consume.
By the way, re eduction--sweet to read of the author's concern for low paid teachers. The plan has shifted in education, however, since 1999. Now it seems that the smart teacher is the obstacle in the way of Core Curriculum implementation, a system of lessons produced by a private entity (paid government funds) that can be taught by anyone.
Really like they way Frank explains how we are hard-wired to compare our selves to others. Thus is does hurt the public when they learn they are paying higher than their own private sector wages for similar or less work by government employees.
Cool to be reminded John Ruskin was one of the founders of the Arts and Crafts movement.
Also he offers an amazing explanation as to why trickle down economics does not work, which more people are finally recognizing--fourteen years after this book was first published! And he states, clearly, the unfortunate fact that too often in politics (and life!) it is not what is true that matters but what people BELIEVE is true.
Some great quotes:
"Per capita income is simply not a good measure of economic well-being...because human well-being depends not just on the quantify of goods we consume but also on the time we have available to do as we please"
"The person who stays at the office two hours longer each day to be able to afford a house in a better school district probably has no conscious intention to make it more difficult for others to achieve the same goal. Yet that is an inescapable consequence of his act.
Amazingly, as recently as 1999, individual savings were important to the economy because they created money that could be leant--even if the money was then repeatedly leant out with only a minimal reserve to, in effect, create more money.
Now, however, we have simply passed over this step with the Federal Reserve simply printing money for us. Now why should people save? There is no interest return, we can take our chances in the stock market but only the big guys can really operate there and then only if they have the fastest machines to get their trades before everyone else. Looking at the info in this book from 2013, and its clear that all the main thing the masses are good for in the economy, now, is to consume.
By the way, re eduction--sweet to read of the author's concern for low paid teachers. The plan has shifted in education, however, since 1999. Now it seems that the smart teacher is the obstacle in the way of Core Curriculum implementation, a system of lessons produced by a private entity (paid government funds) that can be taught by anyone.
Really like they way Frank explains how we are hard-wired to compare our selves to others. Thus is does hurt the public when they learn they are paying higher than their own private sector wages for similar or less work by government employees.
Cool to be reminded John Ruskin was one of the founders of the Arts and Crafts movement.
Also he offers an amazing explanation as to why trickle down economics does not work, which more people are finally recognizing--fourteen years after this book was first published! And he states, clearly, the unfortunate fact that too often in politics (and life!) it is not what is true that matters but what people BELIEVE is true.
Some great quotes:
"Per capita income is simply not a good measure of economic well-being...because human well-being depends not just on the quantify of goods we consume but also on the time we have available to do as we please"
"The person who stays at the office two hours longer each day to be able to afford a house in a better school district probably has no conscious intention to make it more difficult for others to achieve the same goal. Yet that is an inescapable consequence of his act.
August 6, 2015
- really excellent read
- I gave it four stars back when I read it originally in 2006 - but have now changed it to five stars because of the many, many times I have enjoyed remembering passages from this book
- it was the first place I read of the concepts of Economic and Financial Relativism
- often, it is not how much money you have (or are making), but how much money you have as compared to how much money others have - that is the most important factor
- studies have repeatedly showed that the majority of people would rather live in a world where they made $100 thousand a year, while others earned $90 thousand - than a world where they earned $120 thousand a year while others earned $140 thousand
- there is some witty-but-insightful quote along the lines of "Who is wealthy? Wealthy is the man who earns $10 thousand more than his sister's husband."
- the same is true with the cost of any given item...our first world culture has exploded with luxury items of unbelievable/ridiculous cost (diamond-encrusted bras, gold-woven dog collars) which tend to make well-crafted, high-quality goods - previously thought to be very expensive - seem much more reasonable, even cheap by comparison.
- I ran across the concept of Hedonic Adaptation this past year (writing now in 2015), and immediately thought of chapters from this excellent book
- I gave it four stars back when I read it originally in 2006 - but have now changed it to five stars because of the many, many times I have enjoyed remembering passages from this book
- it was the first place I read of the concepts of Economic and Financial Relativism
- often, it is not how much money you have (or are making), but how much money you have as compared to how much money others have - that is the most important factor
- studies have repeatedly showed that the majority of people would rather live in a world where they made $100 thousand a year, while others earned $90 thousand - than a world where they earned $120 thousand a year while others earned $140 thousand
- there is some witty-but-insightful quote along the lines of "Who is wealthy? Wealthy is the man who earns $10 thousand more than his sister's husband."
- the same is true with the cost of any given item...our first world culture has exploded with luxury items of unbelievable/ridiculous cost (diamond-encrusted bras, gold-woven dog collars) which tend to make well-crafted, high-quality goods - previously thought to be very expensive - seem much more reasonable, even cheap by comparison.
- I ran across the concept of Hedonic Adaptation this past year (writing now in 2015), and immediately thought of chapters from this excellent book
May 29, 2012
A good book about luxury and wealth in America. He brings up some interesting and very true points about financial relativism. I have noticed in my personal like that when I hear someone talk about someone else with "tons of money," that the only rule for using this label is that they have more money than you. So the whole psychology of behavioral economics thing definitely appealed to me, but after he made his point he kept on repeating it for about 200 pages without adding any new thought provoking angles. Just the same thing... again... and again.
Perhaps he was very excited about his observation, and it is interesting, but it's not exactly like he discovered the cure for polio or something. Anyways, the latter chapters he did go into a few other topics that switched me back to reading rather than skimming. At the end of the book I was glad that I had rented this from the library.
If you enjoy behavioral economics I'd recommend picking this up.
Perhaps he was very excited about his observation, and it is interesting, but it's not exactly like he discovered the cure for polio or something. Anyways, the latter chapters he did go into a few other topics that switched me back to reading rather than skimming. At the end of the book I was glad that I had rented this from the library.
If you enjoy behavioral economics I'd recommend picking this up.
December 28, 2023
This was a random find from an internet corner (hence the age) but I still found a lot of it interesting, especially as I love understanding behavior in social context- a gap economics has always struggled with. I hadn’t previously heard of consumption taxes, the main proposed solution of excess/unrewarding/externality-producing consumption driven by social competition dynamics. But then I concurrently read a few historical texts that mentioned past sumptuary laws so I guess if you know you know, you know?
September 25, 2015
I read this ages ago. I think I enjoyed it at the time and maybe this was cutting edge in 1999 but just looking at it now it seems full of arguments that have been made elsewhere.
Note - look up stats he cites from David Miliband on the (lack) of relationship between income inequality and economic growth.
Note - look up stats he cites from David Miliband on the (lack) of relationship between income inequality and economic growth.
October 10, 2015
this book tells about the ill fate of human who will choose a salary of 110,000 a year where the others have 125,000, than 100,000 where the others have 90,000.
actually, this is interesting. it also tells a brief about the conspicuous consumption, and talk more about the historical background of it.
actually, this is interesting. it also tells a brief about the conspicuous consumption, and talk more about the historical background of it.
March 17, 2013
Economic data is dated but it makes a good argument for imposing a consumption tax to replace the current income tax to curb luxury spending on conspicuous consumption items and redirect those dollars to investment in infrastructure.
August 4, 2016
Great writing explaining inequality of or consumption habits and how earning a particular amount is not enough when compared to others.
Also puts great argument for progressive consumption tax. This will change the way we think about economics.
Also puts great argument for progressive consumption tax. This will change the way we think about economics.
Read
August 9, 2018Author wants to tax consumption, not tax income. Bad, bad idea. To reward hoarding piles of cash is the opposite of what we need. To slow the funneling of more and more wealth to fewer and fewer people, we must tax wealth itself (steeply progressively), tax income steeply progressively, and not tax consumption. Luxury taxes destroy the one tiny avenue where uber-rich part with some scratch. Tax private planes, destroy the aviation industry: the rich are so tight they squeak--they'll pay top dollar for the best, but slap a tax on the transaction, the deal's off. Tax wealth. Tax income. Don't tax consumption. Not even of luxury goods.
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