Research Article: Are Luxury Brand Labels and “Green” Labels Costly Signals of Social Status? An Extended Replication

Date Published: February 7, 2017

Publisher: Public Library of Science

Author(s): Joël Berger, Alex Mesoudi.


Costly signaling theory provides an explanation for why humans are willing to a pay a premium for conspicuous products such as luxury brand-labeled clothing or conspicuous environmentally friendly cars. According to the theory, the extra cost of such products is a signal of social status and wealth and leads to advantages in social interactions for the signaler. A previous study found positive evidence for the case of luxury brand labels. However, an issue of this study was that some of the experiments were not conducted in a perfectly double-blind manner. I resolved this by replicating variations of the original design in a double-blind procedure. Additionally, besides the luxury label condition, I introduced a “green” label condition. Thus, the hypothesis that signaling theory is able to explain pro-environmental behavior was tested for the first time in a natural field setting. Further, I conducted experiments in both average and below-average socioeconomic neighborhoods, where, according to signaling theory, the effects of luxury signals should be even stronger. In contrast to the original study, I did not find positive effects of the luxury brand label in any of the five experiments. Nor did I find evidence for a green-signaling effect. Moreover, in poor neighborhoods a negative tendency of the luxury label actually became evident. This suggests that a signaling theory explanation of costly labels must take into account the characteristics of the observers, e.g. their social status.

Partial Text

As a precondition for a brand label to work as a signal it must be associated with a desirable trait. As discussed in the introduction, I expect that luxury labels are associated with higher ratings in regard to status and wealth. Green labels could also correlate with higher ratings in regard to status and wealth because green products are typically more expensive than their conventional counterparts. As an additional mechanism, they could correlate with higher ratings on the dimension ‘cooperativeness’ and ‘trustworthiness’, because green signalers are willing to take on a cost in order to benefit the environment—and thus the public. There is no reason, however, to expect that luxury brand labels will invoke higher ratings in respect of ‘cooperativeness’ or ‘trustworthiness’. Hence, I measured the perception of the same individual when wearing a luxury brand-labeled shirt, an organic-labeled shirt and a baseline shirt without a label.

To test whether individuals wearing brand-labeled shirts are not only perceived differently but also treated more favorably in social interactions, I conducted experiments 2 and 3. Specifically, in experiment 2 I test the hypothesis that passersby more often comply with a request of a luxury signaler and a green signaler because they are perceived as higher status.

While the former experiment was designed to investigate whether people are more likely to comply with a request stemming from an individual wearing a luxury brand label or a green label, the third experiment investigates whether wearing labeled clothes yields financial benefits.

In contrast to the original study, and in spite of the considerably larger number of subjects, a positive effect of labels on either compliance or on charitable donations could not be detected. Nor could I find a positive effect of the green label. This holds true for both shirts and caps.

In study 4, which was conducted in a neighborhood with low socioeconomic status, for the first time an effect at least reached the 10% significance level (even though in the opposite direction than hypothesized). For this reason, I also replicated study 3 (i.e., collecting money for a charity) in a neighborhood with below-average socioeconomic status. Instead of Zurich the experiment was conducted in the Swiss capital Bern to ensure that it is not an unknown idiosyncratic trait of the inhabitants of Zurich that is responsible for the lacking effect of the brand labels.

Our main finding is that individuals displaying luxury brand labeled clothes or green labeled clothes are not treated more favorably in social interactions. Rather, luxury labeled clothing even seems to have a negative impact in low socio-economic status neighborhoods. In what follows I address the robustness of these findings. To be more precise, I discuss whether a lack of statistical power or gender interaction effects could explain the absence of positive treatment effects.

Nelissen and Meijers argue that CST explains the human taste for luxury goods in general and for luxury brand labels in particular. According to the theory, an individual displaying luxury items signals that she or he can afford to “waste” money and is thus wealthy and of a high social status. This leads to an advantageous treatment of the signaler in social interactions because humans have a preference for associating with wealthy and high-status people and are ready to pay a premium to affiliate with them. Because neither wealth nor social status is directly observable, when bonding, humans rely on signals, inferring these traits.




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