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The Conspicuous Consumption Phenomenon in Saudi Arabia

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  • Alotaibi Mohamed Meteb

Abstract

With Saudi Arabia's tendency to implement a policy of economic openness to the world from the early 1980s, the phenomenon of conspicuous consumption (society of consumption and imitation) has increased. Due to the adoption of the concepts of economic globalization, changing consumption patterns, tourism and travelling and the spread of multi-national companies which market and promote their products over different mass media, this phenomenon has remarkably gone up. Over time, the effects of this phenomenon have spread to low-income groups, especially young people, and it has been a motive for some young people to earn money illegally to afford it. In addition, banks and financial institutions are providing financial facilities to individuals to finance unjustified conspicuous consumption. This paper aims to identify the concept of this phenomenon at the social, economic and cultural levels. It aims to clarify the most significant factors affecting this phenomenon and its subsequent economic and social effects and risks. Then, it provides suitable recommendations to curb this phenomenon spread in the future. This paper conducted social survey via a sample questionnaire for (300) respondents in three different areas in Saudi Arabia. The survey was conducted during the period from January 2023 till September 2023. It has used also Household Income and Expenditure Survey by General Authority for Statistics (GASTAT) in Saudi Arabia (2007, 2013, and 2018). The results of this paper indicate that social status and the dominance of customs and traditions, bank facilities and installment sales play a major role in increasing the phenomenon of conspicuous consumption in Saudi Arabia. This paper recommends rationalizing conspicuous consumption to reduce its negative economic effects in the future, achieving efficiency in the use of resources, reducing waste, and spreading the culture of saving and investment in Saudi society.

Suggested Citation

  • Alotaibi Mohamed Meteb, 2024. "The Conspicuous Consumption Phenomenon in Saudi Arabia," Prague Economic Papers, Prague University of Economics and Business, vol. 2024(6), pages 731-763.
    • Handle: RePEc:prg:jnlpep:v:2024:y:2024:i:6:id:881:p:731-763
    DOI: 10.18267/j.pep.881
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    References listed on IDEAS

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    1. Micha Gisser & James E. McClure & Giray Okten & Gary Santoni, 2009. "Some Anomalies Arising from Bandwagons that Impart Upward Sloping Segments to Market Demand," Econ Journal Watch, Econ Journal Watch, vol. 6(1), pages 21-34, January.
    2. H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 183-207.
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    More about this item

    Keywords

    Saudi Arabia; consumption theory; rationality; conspicuous consumption; luxury goods;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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