Is Medical Research a Veblen Good?

Felix Salomon argues that fancy restaurants often manage to make their food a Veblen good — something that becomes more desirable when the price goes up. Restaurant food is a way to show off your wealth, in other words.

Veblen and I differ on the long-term value of Veblen goods. Veblen saw them as sort of ridiculous — which is why he coined the amusing term conspicuous waste. Whereas I see them as a way of promoting innovation: Long ago, desire for luxury goods, goods with “wasteful” features, helped the most skilled artisans make a living. These artisans were the best source of innovation within a society.

Unfortunately everyone likes to show off, not just fancy-restaurant-goers. Throughout the medical research community, there is an obvious preference for expensive research over cheaper research. (I’m not saying experimental psychologists such as me are any better: We’re not.) Few medical researchers understand that expensive studies are a last resort and the larger your sample size, the less you understand what you are studying. (Experimental psychologists do understand this.) When people doing research related to health are too concerned with showing off (e.g., doing studies that require expensive equipment) to do effective research, the benefit-cost  ratio of Veblenian behavior goes below one. Desire to show off gets in the way of solving health problems. This is why personal science — using science to solve your own problems — is so important: The personal scientist will do whatever works, regardless of how impressive it is.

3 Replies to “Is Medical Research a Veblen Good?”

  1. On the idea of fancy restaurants being Veblen goods, I’ve thought this may also partly explain why so many expensive foods/drinks are acquired tastes. Very few people enjoy the taste of fine scotch, or moldy cheeses on the first try – most people I’ve seen trying straight whiskey for the first time make a face of disgust. The ability to consume such products without grimacing shows that you can afford to routinely indulge in such expensive pleasures. Of course, anyone could learn to enjoy scotch by drinking cheap whiskey, but such a person wouldn’t learn the language used to describe scotch, and could still be readily identified. Were these goods cheaper so that anyone could afford to acquire the taste, perhaps many less would bother.

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