Status Goods: Experimental Evidence from Platinum Credit Cards in Indonesia

(with Leonardo Bursztyn, Bruno Ferman, Stefano Fiorin and Martin Kanz)
Abstract:
 This paper studies status goods using a series of field experiments. We work with an Indonesian bank that markets widely-recognized platinum credit cards, which are restricted to high-income customers. In the first experiment, we show that demand for the platinum card is substantially higher than demand for its tangible benefits and services. Transaction data reveal that platinum cardholders are causally more likely to use the card in social contexts where others may notice it, implying social image concerns. We next provide experimental evidence of positional externalities from the consumption of these status goods. Finally, we show that higher self-esteem causally reduces demand for status goods, suggesting that self and social image are substitutes.