'Have and have not' mindset drives counterfeit purchases

A survey of consumers in the US and Sweden has suggested that perceptions of income inequality can drive the purchase of counterfeit luxury goods.

The research found that as perceptions of income inequality increased, purchasers ascribed greater value to counterfeit luxury products for their 'egalitarian value' – in other words, their perceived ability to restore equality in society.

Dr Jingshi (Joyce) Liu at City University of London's Bayes Business School, along with researchers from Stockholm School of Economics and Harvard Business School, conducted five studies online and in person, involving more than 2,000 participants, to gauge their views on fake products ranging from designer Rolex wristwatches and Gucci handbags to Burberry and Louis Vuitton scarves.

"Previous research tells us that beliefs about how economic resources are allocated can affect people's behaviours especially when it comes to luxury consumption. We wanted to know how these beliefs may be linked to why people buy counterfeit luxury items," said Dr Liu.

"Rather than serving as a cheap status symbol for those who are unable to afford the full-price luxury item, we argue that counterfeit luxury goods may be used by consumers as a means of rejecting the exclusive markets and companies."

The results paint a picture that is far more complex than the conventional view of fake luxury as imparting "hedonic, utilitarian, economic, and status values" to the purchaser, according to a paper on the work published in the Journal of Consumer Psychology.

The findings contribute to the understanding of how consumers react to income inequality by using consumption to ostensibly shape social conditions, even if their actions are unlikely to have any real impact, according to the authors.

"We think this research is particularly interesting as it links growing inequality to 'deviant' forms of consumption – such as buying counterfeit luxury goods – suggesting that buying counterfeits is not driven by economic reasons per se, but to achieve a sense of social equality," commented assistant professor Dr Wiley Wakeman of the Stockholm School of Economics.

"It also begs the downstream question as to whether mechanism that increase brand exclusivity – such maintaining waitlists for luxury watches or handbags – may counterintuitively manifest the egalitarian value in and the consumption of counterfeits, explaining why consumers might buy these goods."