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Conspicuous corruption: Evidence at a country level

Author

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  • Panos Louridas
  • Diomidis Spinellis

Abstract

People can exhibit their status by the consumption of particular goods or experiential purchases; this is known as “conspicuous consumption”; the practice is widespread and explains the market characteristics of a whole class of goods, Veblen goods, demand for which increase in tandem with their price. The value of such positional goods lies in their distribution among the population—the rarer they are, the more desirable they become. At the same time, higher income, often associated with higher status, has been studied in its relation to unethical behavior. Here we present research that shows how a particular Veblen good, illicit behavior, and wealth, combine to produce the display of illegality as a status symbol. We gathered evidence at a large, country-level, scale of a particular form of consumption of an illictly acquired good for status purposes. We show that in Greece, a developed middle-income country, where authorities cannot issue custom vanity license plates, people acquire distinguishing plate numbers that act as vanity plate surrogates. We found that such license plates are more common in cars with bigger engines and in luxury brands, and are therefore associated with higher value vehicles. This cannot be explained under the lawful procedures for allocating license plates and must therefore be the result of illegal activities, such as graft. This suggests a pattern of “conspicuous corruption”, where individuals break the law and use their gains as status symbols, knowing that the symbols hint at rule-breaking, as long as the unlawful practice cannot be incontestably established.

Suggested Citation

  • Panos Louridas & Diomidis Spinellis, 2021. "Conspicuous corruption: Evidence at a country level," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-14, September.
  • Handle: RePEc:plo:pone00:0255970
    DOI: 10.1371/journal.pone.0255970
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    References listed on IDEAS

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    1. David Dubois & Derek D. Rucker & Adam D. Galinsky, 2012. "Super Size Me: Product Size as a Signal of Status," Post-Print hal-00681415, HAL.
    2. Benjamin R. Mandel, 2009. "Art as an Investment and Conspicuous Consumption Good," American Economic Review, American Economic Association, vol. 99(4), pages 1653-1663, September.
    3. David Dubois & Derek D. Rucker & Adam D. Galinsky, 2012. "Super Size Me: Product Size as a Signal of Status," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(6), pages 1047-1062.
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    Cited by:

    1. Petr Wawrosz, 2022. "How Corruption Is and Should Be Investigated by Economic Theory," Economies, MDPI, vol. 10(12), pages 1-23, December.
    2. J. Atsu Amegashie, 2024. "The Importance of Social Status in a Rent-Seeking Society," CESifo Working Paper Series 10894, CESifo.

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