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Homework answers / question archive / Discussion one To answer the question, Are Apple goods Really Veblen goods? Veblen goods, cause something called the Veblen effect, which is where consumers purchase the products no matter how high the price goes up (Worstall, 2014)
To answer the question, Are Apple goods Really Veblen goods? Veblen goods, cause something called the Veblen effect, which is where consumers purchase the products no matter how high the price goes up (Worstall, 2014). The reasoning behind this perhaps, is that consumers who buy the product believe higher price means higher quality, or that it is for ‘conspicuous consumption’: to be seen as buying an expensive, prestige item (Worstall, 2014). If Apple phones are Veblen Goods, then raising the cost of an iPhone could lead to higher profits but actually- higher its sales as well. So, an iPhone is a Veblen Good to the people who enjoy having the latest iPhone/tablet.
A Veblen good is a product that the demand increases as the price increases. Apple products may increase their prices every time they create a new tablet, computer, or phone, and since there are consumers who strictly call themselves Apple users, they only buy apple products and will pay whatever the cost is to get them. Apple has very exclusive products and Apple is definitely- a high-quality, coveted product (Worstall, 2012). Apple products are expensive, and prices have been going up in recent years; but people feel that its higher price reflects greater quality and displays a wealthy message (Worstall, 2014).
Worstall, Tim. If Apple Is A Veblen Brand Then Raise The Price Of The Next iPhone By $100. April 15, 2014. Retrieved from: www.forbes.com/sites (Links to an external site.).
Worstall, Tim (2012, August 21).The Limit To Apple's Value: Are They A Veblen Good? Retrieved from https://www.forbes.com/sites/timworstall/2012/08/21/the-limit-to-apples-value-are-they-a-veblen-good/#6c2a96ead9f3.
A Veblen good is a good where demand rises as price rises because people feel its higher price reflects greater status(Pettinger 2017). This goes back to the idea for consumers to want to buy products because they are popular, and with regards to Apple products, even though they are expensive, people will still pay the money for them because they want to be like everyone else who owns the newest iPhone. There is an aura to Apple and one of the reasons as to why people continue to gravitate towards them and their products. This is what helps enable Apple to charge the premiums that they do, if they charge premium prices, they are seen as a premium company. Meaning people with wealth can afford them or people who can't but can recognize good taste and value. This helps the theory of them being Veblen goods which tells the world that how cool people are by just owning them(Worstall 2012).
According to Worstall, he believes that Apple is going to have to create entirely new products on the market in order for them to have future growth. I agree with this statement because what Apple has come out with over the years has been amazing, they continue to make the iPhone, iPad, MacBooks, etc. better each year which is great for the regular consumer of theirs, but I think if Apple wants to have future growth in the tech market, which is already competitive as it is today, they will have to start putting out cool new tech products to keep them exciting and relevant to their customers.
Worstall, T (2012, August 21).The Limit To Apple's Value: Are They A Veblen Good? Retrieved from https://www.forbes.com/sites/timworstall/2012/08/21/the-limit-to-apples-value-are-they-a-veblen-good/#6c2a96ead9f3
Pettinger, Tejvan, et al. “Veblen Goods.” Economics Help, 10 Jan. 2018, www.economicshelp.org/blog/1164/economics/veblen-goods/
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