Upward mobility

by on December 4, 2009 at 6:20 pm in Economics | Permalink

Many purchasers of knock-off bags move on to buy real ones within a few years, Gosline found in a separate study of 100 consumers.

“The counterfeit actually served as a placebo for brand attachment,” she said. “People were becoming increasingly attached to the real brand even though they never possessed it at all.” 

…Forty-six percent of the counterfeit-bag owners bought the authentic products within two and a half years, she said.

Here is the story, interesting throughout, and I thank John de Palma for the pointer.

foosion December 4, 2009 at 6:36 pm

The article suggests people can’t tell the difference between real and fake, especially if the user looks prosperous.

Bill December 4, 2009 at 7:02 pm

On the subject of fake luxury goods, there is also a good study on using the price of fake goods to measure the brand value of real goods.

A British marketing prof and a midwest marketing prof monitored fake branded goods prices on street corners in London, NY and other cities.

They found that when the fake branded product prices began to decline, four to six months later the real branded goods experienced a drop off in sales. It also turned out that if the manufacturer increased advertising for the branded product, fake prices would then increase.

Some manufacturers, based on this study, monitor fake branded products as an early indicator of their brand value.

Who says that crooks can’t create value.

Z December 4, 2009 at 7:52 pm

I think its more likely that people do start out coveting the real luxury good, but are forced to buy the more affordable counterfeit first to attain some incomplete measure of ‘owning the brand’.

After their earning capacity has risen, they go back to buy the real one.

I don’t think you have to own a brand to become attached to it.

forager December 4, 2009 at 9:27 pm

I’d have to disagree with the suggestion that the fake products don’t actually compel people to purchase the real ones (rather they always wanted the real ones). As an example, I was never much of a luxury goods purchasing until the first time I went to China. I bought fancy brand name products for dirt cheap, and while they weren’t authentic, they were certainly of excellent quality (higher than non-luxury goods). I then actually began to enjoy the quality of the items, and I think I began to really appreciate the value difference between them. Before I used to think it was just a brand tag, but there are subtle differences (however the extra value added isn’t usually as much as the price increase). Anyways, that’s my two cents.

anon December 4, 2009 at 10:33 pm

“There probably is no difference between the real and fake.”

Ridiculous!

Rob Ross December 5, 2009 at 12:52 am

A similar argument has also been made about downloadable music. By making music free to download, entertainers get booked more often and get paid more for each show.

ranon December 5, 2009 at 3:04 am

So, the number of bags sold by say, Louis Vitton today should be half that sold by the counterfeiters two years ago?

The numbers do not add up.

dearieme December 5, 2009 at 5:23 am

All I want is food, heating, clean water, working sewers and a flat on the Ile St Louis. All the rest is baubles.

anon December 5, 2009 at 10:57 am

“How so?”

My guess is that from a distance people can’t tell the difference. Unsurprising.

It does not follow that there is “no difference between real and fake.” That would imply the goods are the same. They aren’t. That’s what I was referring to.

MikeB December 5, 2009 at 6:21 pm

Dan Ariely did an experiment which showed that people who used “fakes” became more likely to “cheat” in other ways, even if they were initially given the fake rather than choosing to purchase it. Gosline’s result seems inconsistent with Ariely. I think I saw the Ariely video discription on his blog, but couldn’t find it just now.

Kushal December 7, 2009 at 2:20 am

To get away with using a fake item, others need to believe you’re rich enough to buy the real product. I agree with the previous comment that there may not be much difference between the real and fake product, as they might actually be made in the same factory.

http://www.commonsense-isnt.com

indianajim December 7, 2009 at 9:59 pm

The price of real bag xyz will fall over time as the stock of real xyz bags and fakes rises. Fashion has to cycle if it is to be an effective signal of wealth; the wealthy have a comparative advantage over the poor in keeping up with fashion.

five fingers September 22, 2010 at 1:31 pm

I gree with it!

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