ABSTRACT
Harvey Leibenstein, in an effort to incorporate the concept of “conspicuous consumption” into neoclassical demand theory, classified demand for consumer goods and services into two general categories: functional and non-functional. “By functional demand,” Leibenstein wrote, “is meant that part of the demand for a commodity which is due to the qualities inherent in the commodity itself” (1950: 188-9). “Non-functional demand,” as Leibenstein defined it, included demand “due to external effects on utility”: a “bandwagon” effect because others are consuming the same product and a “snob” effect resulting from reduction of demand because others are buying it.1 In this paper I contrast Leibenstein’s argument with the quite different anthropological and institutionalist interpretation of consumption, and consider evidence for and against both perspectives.
