Discretionary income in the context of "Conspicuous consumption"

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⭐ Core Definition: Discretionary income

Disposable income is total personal income minus current taxes on income. In national accounting, personal income minus personal current taxes equals disposable personal income or household disposable income. Subtracting personal outlays (which includes the major category of personal [or private] consumption expenditure) yields personal (or, private) savings, hence the income left after paying away all the taxes is referred to as disposable income.

Restated, consumption expenditure plus savings equals disposable income after accounting for transfers such as payments to children in school or elderly parents' living and care arrangements.

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👉 Discretionary income in the context of Conspicuous consumption

In sociology and in economics, the term conspicuous consumption describes and explains the consumer practice of buying and using goods of a higher quality, price, or in greater quantity than practical. In 1899, the sociologist Thorstein Veblen coined the term conspicuous consumption to explain the spending of money on and the acquiring of luxury commodities (goods and services) specifically as a public display of economic power—the income and the accumulated wealth—of the buyer. To the conspicuous consumer, the public display of discretionary income is an economic means of either attaining or maintaining a given social status.

The development of Veblen's sociology of conspicuous consumption also identified and described other economic behaviours such as invidious consumption, which is the ostentatious consumption of goods, an action meant to provoke the envy of other people; and conspicuous compassion, the ostentatious use of charity meant to enhance the reputation and social prestige of the donor; thus the socio-economic practices of consumerism derive from conspicuous consumption.

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Discretionary income in the context of Nouveau riche

Nouveau riche (French for 'new rich'; French: [nuvo ʁiʃ]), new rich, or new money (in contrast to old money; French: vieux riche [vjø ʁiʃ]) is a social class of the rich whose wealth has been acquired within their own generation, rather than by familial inheritance. These people previously had belonged to a lower social class and economic stratum (rank) within that class and the term implies that the new money, which constitutes their wealth, allowed upward social mobility and provided the means for conspicuous consumption, the buying of goods and services that signal membership in an upper class. As a pejorative term, nouveau riche affects distinctions of type, the given stratum within a social class; hence, among the rich people of a social class, nouveau riche describes the vulgarity and ostentation of the newly rich person who lacks the worldly experience and the system of values of old money, of inherited wealth, such as the patriciate, the nobility, and the gentry. Though people who came from lower social classes are beginning to see it as a compliment rather than an insult, viewing it as recognition that they built their own wealth and status.

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LINKED FROM (PARENTS)
← Nouveau riche ← New money ← Conspicuous consumption
LINKS TO (CHILDREN)
Sales taxes in the United States → Property tax in the United States → Value-added tax → Property tax → Personal income → Income tax → National accounts → Personal consumption expenditures price index → Savings →