How Does House Demolition Affect Family Conspicuous Consumption?

Family conspicuous consumption behavior is affected by many factors. Existing pieces of literature seldom focus on the impact of house demolition on family conspicuous consumption and its underlying mechanism. Based on the mental accounting theory and conservation of resources theory, this study uses the micro-data of the 2011 China Household Finance Survey to empirically examine the relationship between house demolition and family conspicuous consumption. Robustness results suggest that house demolition positively affects household conspicuous consumption, which is not only reflected in the overall consumption level but also in the level of average consumption. Further analysis finds that household wealth and materialism value have a significant positive moderating effect on the relationship of the main effect. In addition, in order to clarify the relationship between conspicuous consumption and luxury consumption, this study finds that conspicuous consumption and luxury consumption are not completely equivalent through in-depth theoretical analysis and exploratory investigation. There are similarities in both consumption motivation and pattern, but with differences on consumer subject and object. The contribution of this research is to enrich the theory of decision-making in consumer behavior, which also has certain significance in deepening the understanding of the relationship between conspicuous consumption and luxury consumption.