Status Consumption and

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Dutch Design in Development Lecture, July 14,
2005
Status Consumption and Poverty in Developing
Countries Evidence from Bolivia Luuk van
Kempen Development Research Institute
(IVO) Tilburg University
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Introduction

• The Economist, July 9, 2005
• Question How should the blueprint look like for
  a mobile phone that suits the needs of the
  developing country poor?

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Introduction

• Nokias view is in sharp contrast with past
  efforts to develop products that are
  appropriate for the poor
• Basic idea Make Western products more affordable
  by stripping them of all non-essential or
  redundant features ?
• Maintain or increase functionality of the
  product at the cost of its appearance or
  looks ?? reduce products status appeal
• Local adaptations/imitations of Western products
  are often exactly the opposite of such
  appropriate products.
• Wristwatches that do not work
• Cheap counterfeits (fakes) of Western brand-name
  products
• Uphold status (often based on deception), but
  compromise on quality/functionality.

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Maslow hierarchy-of-needs (1954)
POVERTY
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Evidence against conventional view

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How Familiar Are the Poor with Western Designer
Brands?

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Perfume experiment

• 104 respondents are shown two Calvin Klein
  perfume bottles
• - one with the CK logo (1), and
• - one from which the CK logo has been removed
  (2).
• The perfumes are otherwise identical.

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Results

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Results
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Conclusion

• Conventional view of poor being exclusively
  focussed on basic needs urgently needs revision
  
• ? poor also consume luxuries in order to gain
  status

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T-Shirt experiment

• Does the consumption of Western brands by the
  poor provoke envy in poor observers?
• Three identical T-shirts, except for brand logo
• 1 fake Nike logo
• 2 fake Polo Ralph Lauren logo
• 3 logo of local brand (SS)
• Procedure anonymous game between 2 players
• Loser in the game is shown the 3 shirts and can
  manipulate which of these shirts the winner takes
  home
• (Loser wins nothing, regardless of his
  manipulation).

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Average probability for winner to receive a shirt
of this brand (after manipulation by the loser)
SS