I've never understood the desire to own things like Rolex watches.
It's a watch. It tells you what time it is. You can get a pretty durable one that'll last you nearly a lifetime for under $100, especially if you get a digital one since there's no moving parts to break.
So why spend $5,000+ on one? I mean, yeah you might want to get something fashionable and shiny, but that doesn't require a $5,000 purchase.
I feel that the only reason to spend $5,000 on a watch is so that you can show off to other people that you can afford to piss away $5,000 on a watch, which is just silly.
I'm more of $30 Timex guy myself for day-to-day wear. But there are people who appreciate the craftsmanship associated with high-end watches. There also is such a thing as fashion which I don't personally much care about (within reason) but many do.
Most people who have some amount of money spend it on things that aren't strictly utilitarian.
You're all fools! All you need is a good stick and the sun's light and you can tell the time of day! Wasting 30 dollars on a watch!
Joking aside, there are people who refuse to ascribe anything BUT utilitarian value to things as a sort of anti-consumerist view. Going to be hard to convert them.
Expensive mechanical watches don't work very well. For all the marketing written about craftsmanship and history and so on, the harsh truth is that they're not nearly as good as keeping time as a cheap digital watch with a quartz crystal.
(Casios are rated between and 1 and 0.5 secs/day, while a Rolex Chronometer is rated to 2 secs/day. High end quartz watches that cost thousands can be rated to 5 secs/yr. Of course a phone that supports NTP on a network should be at least as accurate as that.)
So the only reason for buying an expensive watch is to signal that you can afford an expensive watch. And if you're going to do that, you might as well have a piece of solid gold surgically implanted in your forehead.
If that's ridiculous - and it is - why is it any more ridiculous than spending tens or hundreds of thousands buying a watch that may well be ugly, inelegant, bulky, or even vulgar, and isn't even outstandingly good at being a watch?
Does 2 seconds a day vs. 1 second a day really matter to you, or most people?
There certainly is signaling for many people's purchases of high-end watches (moreso with Rolexes which are easily recognizable compared to some "better" or more expensive brands... Pateks generally are quite understated) but some people appreciate the esthetics, or the intricacy of the mechanics. And really, if you do have money, is it really different from collecting stamps (even less utilitarian value, generally) or classic cars (yeah, you can get from point A to point B, but with far less comfort and safety than in a modern econobox) or anything else?
Not everything in the world is about purely utilitarian value.
(In all seriousness, one of the most common ways I check the time, besides my phone unlock screen, is checking how much sunlight I have left by the "1 hand above the horizon = 1 hour" method.)
My take is that its basically a branded bitcoin with some personal utility and personal luxury component mixed in. There is a built-in hope that there will be a larger audience for these products (i.e. more globally affluent consumers, etc.) who will drive the price up and that it is sufficiently resource intensive (labor in this case) to build new ones.
> I feel that the only reason to spend $5,000 on a watch is so that you can show off to other people that you can afford to piss away $5,000 on a watch
There are social and political circles in which demonstrating the ability to piss away money without caring is the only way to rise in status/power. You think it's silly, and from a standpoint of pure utility, that may be true. But it doesn't make it less important to the people who move in those circles.
I'm not a fancy watch buyer but I'll try to explain some of the thinking.
To luxury buyers, it's not a "watch". Instead, it's "jewelry for the wrist that just happens to tell time."
Therefore, explaining the technical superiority of the quartz crystal accuracy of a $10 Casio watch compared to the mechanical springs of a Rolex watch is an ineffective critique. It's not even relevant that the Rolex keeps time less accurately.
It's a status symbol. To them the Rolex is like a code base written in idiomatic Haskell, the Casio is a code base for a pet shop written in php sprinkled across a dozen html files.
For what it's worth, my $9 bright pink Casio has netted me more compliments over the past six years (and it's still using the original battery!) than probably every other accessory/item of clothing I've worn over that time combined.
> To luxury buyers, it's not a "watch". Instead, it's "jewelry for the wrist that just happens to tell time."
That's probably the best description I've seen for appreciation of expensive watches.
FWIW though, if you were to wear a knock-off of a luxury brand with your fancy suit at some event, would anyone even notice without taking a close look to specifically examine your watch?
Depends a lot on the knock off. Some are terrible. I have a colleague that wears an "Omega" that is laughably bad. Some of the better ones though are much harder to spot.
I have a Rolex knock off, purchased in the mid 2000’s in HK for $200AUD that is so good that two watch repair places I’ve taken it to have declared it one of the best fakes they’ve ever seen. Which is quite amusing because I got it mostly as a joke! It’s quite a lovely mechanical watch on its own, even without all the “Rolex” bits.
My favorite fake Rolex anecdote comes from my days in comparison shopping. There are three ways to get paid on the internet, for impressions, for clicks and for actions (eg, "actually buying something"). The latter typically pays a revenue share, which varies based on the item. Electronics have a tiny profit margin and usually pay something like 1%. Clothing has a giant profit margin and frequently paid 10-30%.
The highest revenue share I saw was for a fake Rolex watch (which was marketed as a fake!), which had a 50% revenue share.
I tend to agree, to a point. My wife got me what I would consider an expensive watch (~$600) as a single present for several 'events'. I love it because it is an insanely thin
and light watch, so it is very comfortable to wear. The craftsmanship is amazing and you wouldn't be able to replicate it without a similarly high price tag.
So, 5k, no, a couple hundred... yea, if it's made well enough.
I really ought to go get it fixed... I smashed the glass with one of my rings. :(
> I feel that the only reason to spend $5,000 on a watch is so that you can show off to other people that you can afford to piss away $5,000 on a watch
This is everywhere and unfortunately a somewhat important social dynamic. I mean, what do you really think an MBA is? It's someone who can prove they can not work for two years and throw away $100k+ to party. And Goldman/McKinsey want to hire people who are part of the social class that can do that.
I own a $25,000 Lange & Söhne. While watches are a time-honored way of signaling, I didn't buy it to show off. I've actually never met anyone who recognized it, and off the top of my head I can't remember ever even getting a compliment on it. I'd never buy a Rolex, because they're too loud :)
Here's the disconnect you're struggling with: you don't value watches. Or more accurately, you don't appreciate them beyond simple utilitarian timekeeping. That's fine, most people don't really care about them. Instead of trying to relate to people who buy expensive watches by valuing watches - which you clearly don't - relate to them through the broader experience of spending a lot of money on a hobby.
Do you have any hobbies you spend "a lot" of money on, perhaps more than what's required just to engage with the hobby? Keep in mind that "a lot" is arbitrary. I have a friend who spends thousands of dollars on card games. I don't see the appeal, but it makes him happy and trading card games can be a fun activity. That hobby "doesn't require" a purchase of the most expensive, collectible versions of various cards, but people do it anyway. I'm pretty sure my friend doesn't do it to signal that he can spend that money :)
The point is this: what's expensive for one person is affordable for another, and what's valuable for one person is frivolous for another. There's not much beyond that. It's all relative - in principle it all comes down to whether or not you spend strictly more than you need to on a thing so you can enjoy it beyond its raw functionality. If you do, then you're no longer treating that thing as a tool, you're treating it as a form of art. Like all forms of art, expensive watches are polarizing and subjective, and they attract a subculture of people who discriminate between things which seem utterly arbitrary to people who don't appreciate them.
Yeah, see and that's the thing: I simply cannot even imagine having a hobby that would have me spend thousands of dollars. I would sooner switch hobbies.
I mean, I don't mind if others have such hobbies -- to each their own. As a matter of fact, I have some friends, too, who are into collecting expensive watches. Yet, I still don't get it, just like in the grandparent comment.
> I simply cannot even imagine having a hobby that would have me spend thousands of dollars. I would sooner switch hobbies.
Your imagination needs work. Being on HN, I'd assume that you have at least one hobby that necessitates a significant amount of electronics (gaming console + TV, monitor + PC, laptop). Any one of these (if you actually care about the hobby) will run you thousands of dollars.
You'll probably dodge at this moment and say how necessary or important or utilitarian all those things are, but that's just because you like your hobbies and don't like other people's.
Spot on. I’m into three main hobbies: gaming (and game development), audio production and recording, and photography (digital & film). It wasn’t until the other day when someone pointed out that all those hobbies are quite expensive that I sat down and thought about it: while I bought a lot of my gear second hand and did a good job of making my purchases efficient, it really does add up!
I think the difference is that the hobby is the thing you do, not the act of buying itself. I have a probably un-utilitarian hobby of building/upgrading maintaining my desktop computer. But still, the hobby is the building/upgrading/maintaining part, not the buying part, using the thing is great too, but I probably don't purely need everything I've put into it. So in a way, I don't get it either. With the watch example, the hobby seems to be the act of buying itself, since you don't actually doanything.
There are conferences and meetups you can go to for the purpose of hanging out with other watch collectors and geeking out about watch features. Buying the watch is not the hobby, wearing it is.
> Buying the watch is not the hobby, wearing it is.
I'm not sure I see the distinction between "wearing it" and merely "owning it", as they both seem somewhat passive activities (if you'll pardon the oxymoron).
In other words, I'm asking, is the hobby one of collecting (as with stamps or coins), or is there something involved in the wearing that is the fundamentally interesting/engaging part of the hobby?
Perhaps what most commenters (including me) are skeptical of is that hobbies have also been known as "pastimes" and are, presumably enjoyable, ways to pass the time.
I suspect that most here would agree that for "expensive" hobbies, such as high-end computer gaming, automotive racing, or aviation, they would still participate in it and call the hobby by the same name if they didn't personally own the equipment necessary to engage in their chosen activity (and merely had unrestricted, or even shared/restricted, access to it).
I'm not so sure this is the case, however, for something like art collecting. If that person doesn't get to keep the art, isn't that really just an art buyer, not a collector?
As a "watch wearer" I find wearing the watch to be the whole point. If there was a service where I could wear different watches without owning them I would be all over that. If I could only own watches to display them in my house and never take them out I wouldn't bother.
> As a "watch wearer" I find wearing the watch to be the whole point.
I am, indeed, surprised by that, but only, again, because it seems passive. Is there more to it, like being seen? Seeing others' reactions? I'm genuinely curious.
I also suspect you're unusual, which is why I was hoping to hear from the original commenter. I could, of course, be quite wrong.
> If there was a service where I could wear different watches without owning them I would be all over that.
I did a web search for "luxury watch rental" and found something at least vaguely similar. If those services aren't what you're looking for, maybe that's a business idea, along the lines of pooling/sharing private jets.
> If I could only own watches to display them in my house and never take them out I wouldn't bother.
Seems like a false dichotomy. However, it's closer to the actual practice (as I understand it) of owning multiples units but only ever wearing one at a time.
Of course, I'm lumping "collectors" in with "wearers", but that's partly because it's so difficult to distinguish from external observation and partly because some commenters have described watches as art, something which doesn't generally have an activity it can be used for.
a lot of people really do nothing but watch tv at home all night. it's truly incredible. I am guessing there is a subset of these people that do not think about expensive hobbies at all, let alone reading about one or attempting to imagine one.
You will be surprised but I don't have a gaming console, my TV is an old bulky tube one, and the last laptop I bought (and still use) was a netbook for under $300. That's exactly why I said I would not spend thousands of dollars - I do spend _some_ money on my hobbies but it's nowhere near the sums that expensive watches are traded for.
1815 38.5mm in white gold, model 235.026. Funny you say that, because at the time I was torn between the Lange and a Jaeger-LeCoultre Master Ultra Thin, model 130842J. I like the form factor and complications of the JLC, but the simplicity and movement of the Lange won out for me.
> I own a $25,000 Lange & Söhne. While watches are a time-honored way of signaling, I didn't buy it to show off. [...arbitrary justification...]
i see what you did there, you rascal--use a forum where people might care about such signalling and make sure they will know your watch in the future, so when they see it on your wrist, they'll wish they were you.
-- non-watch wearer (see how much cooler i am for not caring?)
> relate to them through the broader experience of spending a lot of money on a hobby.
And when it comes to the hobby of expensive watches...you get nothing but an expensive watch.
Every other hobby, you get something.
PC gaming? You've got games you can play, and a monster computer that can run them with beautiful graphics.
Card games? You've got a collection of cards and can quickly build new decks to adjust to the changing meta.
Model trains? I've seen some really impressive miniature towns people have built around a model train set.
I just don't understand expensive watches.
> Here's the disconnect you're struggling with: you don't value watches. Or more accurately, you don't appreciate them beyond simple utilitarian timekeeping.
That sums it all up pretty well. If I'm spending a lot of money on something, I want there to be at least something useful or enjoyable that I'm getting out of it, beyond the enjoyment of simply having it, which typically is not something ever feel about things. Things are just things. The only value they have IMO is their utility.
(Though I would certainly attach sentimental value to something that was made by hand by a relative and passed down)
I think of it like mechanical art pieces. A blend of mechanical engineering, art, and craftmanship. Plus if it's made out of precious metal it's a hedge against inflation.
And like art, it has a robust secondary market, which means some of the rare ones can go up in value, sometimes by a lot. People don't buy art because they get something, they buy art because they simply appreciate it.
Everybody is different. I'd pick a thousand dollar watch over a MTG collection or a gaming tower any day (mostly because I don't think gaming is valuable at all)
It seems like you can't get past the idea that you're buying something expensive and ostensibly not doing anything with it. Consider it like this: if you were to buy a Rothko, you would not be able to do anything with your new painting except look at it. That sounds kind of dull, right? It is dull - unless, of course, you love art, and Rothko in particular. Maybe you also happen to be part of a community of art enthusiasts who similarly love Rothko's work. Maybe you like to get into spirited debates about it.
So it is with watches (or anything else, really). You think that the enjoyment of a watch is simply having it, but that's not how the hobby is enjoyed by its enthusiasts. Watches like this are enjoyed by talking with other collectors, admiring the movement, geeking out over the features ("complications") built into the watch, commiserating over ingroup gossip, etc.
It's not for everyone, and I don't blame people for not "getting" watches! The subculture might be somewhat inscrutable from the outside, and it can be easily dismissed as an idle fancy for the rich, but there is a lot more depth to it than what you're seeing.
False dichotomy. A person who can afford to spend $25K on a watch usually has some more money left after they bought the watch. You have no idea what throwawaymath does with the rest of his/her money.
Maybe your judgementalism is as much a problem as their relativism?
And, by the way, the point about "relativism" wasn't about moral relativism at all.
I don't see how any of that is relevant to the point: "You could have saved a dozen lives. Instead you bought a watch. I have a perfectly objective justification for holding you in perfect contempt." Okay, granted that 'perfect contempt' is a bit strong, the reasoning seems good to me, I understand it and sympathize. How much money they have left over or what they do with the rest etc doesn't affect that in the slightest. Does it?
OK, here's someone with $1M. They keep it. If $25K could have saved a dozen lives, they could have saved 480 lives. Are you outraged?
Here's someone with $1M. They give away $25K in a way that saves a dozen lives. They also spend another $25K on a watch. Are you outraged? Are you more outraged than the previous example because they wasted money on the watch? (Is that better or worse than keeping the money in the bank?)
Here's someone with $1M. They give away $975K, saving 468 lives. They take the last $25K and spend it on a watch. Are you outraged because they didn't also give away the last $25K? Does the watch blind you to the good they did? Or did they have to give away all $1M to avoid your "perfect contempt"?
See, you're judging their selfishness by the one purchase, not by the whole of their economic activity. I dispute whether that is a relevant metric.
Isn't there some trickle down effect though? Is there a good way to quantify it? Someone pays $25k for a watch. They probably paid income tax or capital gains tax on the income they earned on that $25k. And then there could have been a sales tax and/or a luxury tax. But the watch manufacturer pays the watchmakers and for raw materials and marketing and its capital investment in buildings, etc.. And those watchmakers buy houses who were constructed by someone, and the raw materials were mined somewhere. Is there any systematic theory of moral economics which tries to rank these complicated things given some basic moral tenets/axioms? Like buying food for a starving village is better than setting fire to a stack of $100 bills which is better than hiring mercenaries to murder the villagers. It seems like the $25k watch transaction is between the buying food and burning cash. But what about investing that $25k in the index funds? Is that better than buying the watch because it cold potentially help companies which are creating vaccines in the future? Or is it worse than the watch case, because it is also proping up companies polluting the atmosphere with CO2 currently? Is it better to spend the $25k on a fancy watch, or a non-decorative chunk of gold? Is it better to buy one $25k watch, or twenty-five $1k watches?
But rest assured - given your demonstrably comprehensive knowledge of my altruistic habits, I'll make a note to consult with you about which particular lives I should deign to save the next time I'm considering funding one of my hobbies. I'm sure playing messiah and saving "a dozen lives" will be even more satisfying to my narcissism than shiny things; thanks for the suggestion!
The majority of the point is signaling, yes. To determine whether or not it is silly, you need to consider the goals.
A majority of the point of college for a lot of people is also signaling. Is that silly? Again, it depends.
You may dislike comparing an expensive watch to an education, but there are people out there with a lot of money who care a lot more about your ability to look like their wealth-peer than they do about your education.
I'd rather have the education, too, but there are lots of people in the world who don't work that way.
(I have a couple nicer-than-cheap watches. One is due to features, the other is just gorgeous. Neither was anywhere near $5k.)
Not that I care much about signalling, but you can't signal your education unless you bring you degree with you. You can signal your wealth.
Wealth generally signals success, and if you're successful no one cares about your education. Formal education also doesn't mean intelligence. You can be super smart and have no degree, and be successful.
Some people buy a rolex because they want to display their wealth. Others buy a rolex because they love watches, and wish to own a pinnacle of the craft.
I feel like you chose a bad example. Designer handbags for instance, seem to be more geared towards status symbols, although I am sure there are exceptions.
A chris reeve sebenza is an example of an item that is desirable primarily because of it's craftsmanship and only secondarily due to its price. If you own one, the chance of someone else being aware of its value is practically zero.
It's silly is that wearing $5k+ on your wrist is effective at influencing people.
What's even more silly is your ignoring that fact.
So-called status symbols are actually quite effective at getting people to pay attention to you, which is kind of important if you wish to compel them to do things.
That's why it's silly. It's not just the watches, or handbags, or cars - it's the political implication that this form of display increases your social influence, and your ability to acquire further wealth.
If that's true - and it seems to be - that strongly suggests politics and economics are superficial and essentially trinket- and appearance-driven, and only very distantly related to genuine achievement or merit.
IMO that's not just a problem, it's a disastrous failure of spirit, ethics, and imagination. It's fine if your institutions and values are operating at a pre-rational barely sentient level, but if you're trying to aim higher, it really isn't such a good thing.
Is it really surprising to learn you can manipulate how people perceive you by doing such silly things as wearing an expensive suit and/or watch, driving an expensive car, taking them to an expensive restaurant, etc?
How is any of this new information? It's so well-known we've even got a silly name for the "power suit".
Sometime it can work in reverse, I won't buy things from people who overtly display their wealth. If you turned up on my doorstep in an expensive car you are going to have a hard time selling me anything.
> it's also the only acceptable piece of jewellery for a man to wear
Not quite.
Though the only other one that can be a status symbol to any significant degree (among the assumed demographic) is a class ring--assuming you went to an "appropriate" school.
One important difference is that Giffen goods probably don't actually exist in the wild given that they depend on a somewhat contrived substitution effect.
Well, the mechanisms are generally different too. Giffen goods can exist even for simple models with homoeconomicus. Veblen good generally involve a signaling/status story.
I've seen enterprise products with great features try to be way cheaper than the "market" price and get very little traction.
Raise prices to around market level, and people are suddenly excited about the features and buying.
Apple software (kind of). It's tied to specific hardware, so it's hard to say if people are paying for the software or the hardware.
I have seen people turn down free software because they mistakenly believe an expensive program must be better. But that's not really the same, since that isn't a form of showing off.
I think it's relatively common advice that you don't price software between $500 and $10K. Below $500 you sell through mass-market channels and market to the end users (or their low-level managers) who buy it on their expense accounts. Above $10K you send out high-priced salesmen to sell to the C-level. It's much more difficult between those two levels, so you can increase sales by increasing prices above $10K.
This old piece of common wisdom is probably mostly obsolete now that software is generally sold as a subscription...
Yeah, sounds crazy, but.. I've noticed when new cafes open, if they're kind of expensive they often quickly get packed with trendy people. If they were cheap, that glamour just wouldn't be there.
A lot of that, and a lot of the remarks on this page, seem to have to do with a glamour of money, a faintly sexual worship of money. And the 'love' in that seems love of themselves, and not in a good way.
This is absolutely what happens. Once you go beyond a few $1000s of dollars, you're paying for the privilege of demonstrating that you can afford to pay that much for an entertainment center.
My father-in-law's like this. Every time he visits he tells us all about his home theatre setup and how he's spent $15k on this component and $20k on that other component, and that it was a bargain because it usually costs $35k but he got a good discount because he's friends with the store owner. You bet he is, with the stuff he buys! But hey, it makes him happy.
Interesting. I often find that my perceived 'luxuriousness' of a product decreases the perceived value of it. Like I'm sure Rolls makes nice autos and all that, but because they are created specifically to be high-end status symbols, they become cheapened in my mind and therefore cannot truly be high-end status symbols. A valuable good or experience is instead one that has an authentic story (which is hard to judge), or is super niche and shows an understanding and appreciation of the field, or is old and unique and difficult to obtain.
I collect camera lenses for example and see people drop crazy money on old Leicas. And they are nice lenses but it's such a stereotypical choice that I can't help but negatively judge anyone who actually buys or aspires to them. Their brand's mystique has cheapened them for me. And let's not even get started on Hasselblad...
I don't have a theory fully worked out for this, but I'm half convinced that rents in HCOL coastal cities fit into this framework. Sure, it's nice living in San Francisco, but you can get the same or better weather in smaller coastal towns, get more space and live better on a cost of living adjusted basis in a whole lot of other places. But still people come to the big cities and struggle to make it financially.
The good jobs and appreciating real estate, admittedly limit how well this theory fits together, but a big HCOL city is prestigious and exotic in large part because of, not despite, its price.
A HCOL city brings a bunch of things together that you can't get all together elsewhere. Critically:
1. Jobs
2. People
3. Events/activities
You can pay the San Francisco premium and have a massive job market, a million people to befriend/date/learn from/etc, and thousands of activities and experiences to engage in constantly. Or you can live in a small town with far fewer job opportunities, far fewer people, and far less to do.
Small town life is not a bad choice if it's what you want. But if you want to live in a lively city, you're going to pay for it, because a lot of people want that life and you're competing with them for a space to do it.
That explains the draw of SF vs Monterey, but not necessarily SF vs Houston. Why do the most prestigious cities reliably stay the most prestigious cities, if not for the prestige itself being the draw?
As I said, I'm grasping a bit because I'm not sure I fully grok it. But there is something that would be lost about Manhattan if it became cheap. I believe it's not just the three items you list, but also the concentration of people that not only want to, but crucially, can afford the price of entrance. Beverly Hills comes to mind as an example, why do the rich and famous want to live there if not to also be surrounded by other rich and famous? Perhaps that's closer to the common link you mention in Palo Alto.
Yes, clearly much of the appeal of Beverly Hills is the proximity to wealth. I don't think that's nearly as applicable to San Francisco, given that the proximity to wealth is countered by the proximity to homeless encampments.
I will concede that for some portion of people, the prestige of living in San Francisco is a part of the draw. There are other factors that are probably more important for a lot of people, though. Comparing to Houston, San Francisco is literally 5 times as densely populated, which changes the feel of the city drastically. Houston is larger in terms of population, but it's also massively sprawled. That sprawl drives down the price of homes but also makes much of the city feel like the suburbs (probably; I have not visited).
Houston also spends >100 days/year at >90F, which makes it not comparable to a coastal city for people who do highly value temperate weather.
Urban rankings are quite surprisingly durable, with the US being among the worse examples of this, given, say, the rise and fall of numerous formerly-great cities, say St. Louis or Detroit, or to a lesser extent Boston or Philadelphia.
Globally, Rome, London, Paris, Tokyo, and other major metropolises have sustained themselves for centuries. In cases, millennia.
The Bay Area's biggest risk is likely its high cost of living given induced housing constraints. If an alternative centre emergess, as Los Angeles did in the 11920s, following the 1906 fire and earthquake, plus San Francisco's transport and water limitations (neither the bridges nor Hetch Hetchy existed at the time), as well as LA as a resource hub (oil). That advantage remained until the 1990s defence contraction, which hammered Los Angeles.
If you really want to see durability of prestige, though, look to universities. Virtually all the great mediaeval European universities remain notable, and several (Oxford, Cambridge, Paris, Leipzig) remain world-class. In the US, Harvard and Yale (among others) pre-date the country itself. Even in California's public university system, founding campuses Berkeley ("Cal") and UCLA, founded in 1868 and 1919, respectively, greatly out-rank subsequent expansion campuses.
(UCSB, 1944, Riverside; 1954, Davis, 1959; San Diego, 1960; Irvine, 1965; Santa Cruz, 1965; Merced, 2005. UCSF medical school, 1873, is not a general-education campus.)
Veblen goods are an information adjunct to a complex state that the buyer wishes to communicate more clearly. In this, they're related to a broader Gresham's Law dynamic, where the complex state is a "good coin", and the Veblen good makes communicating the "coin's" value, and differentiating it in the marketplace, more effective.
Though there may well be a rents dynamic to this as well.
HCOL cities, where housing decisions and dynamics are driven by earning rather than signalling characteristics, are rents, but not information goods in the sense of Veblen.
(A high-status, marquee, mansion or apartment more closely resembles a Veblen good, though for signalling purposes this cannot apply to an entire regional housing market.)
My theory about the meteoric rise in US undergraduate tuition since the early 1980s is that colleges and universities realized they could turn undergraduate degrees into Veblen goods.
I don't think demand increases as the price goes up - only that colleges realized demand for an undergraduate degree was inelastic and that consumers could pay any price because they could get guaranteed loans from the government.
Veblen goods offer signalling opportunity, and must be both immediately cognisibly to the intended signalling audience (though not necessarially others) and high in cost in order to manifest credible signalling. They are not utility or consumption goods, but information goods.
They exist where the underlying trait being signalled is difficult to communicate clearly or effectively, a circumstance especially true of social status signalling. Paradoxically, the hyperwealthy need not signal so loudly (they themselves are sufficiently well-known), but as one descends the ranks, say, below the top ten and above, say, the 90%ile (higher or lower as you prefer), that signalling becomes more necessary and costly.
This is similar to a whole set of fad-driven behaviours, ranging from speech and etiquette to clothing, diet, music, politics, management, and programming fashions, where the underlying domain is complex. Eventually the faad itself becomes dominated by poseurs whose false affectation dilutes the signal.
91 comments
[ 4.2 ms ] story [ 174 ms ] threadIt's a watch. It tells you what time it is. You can get a pretty durable one that'll last you nearly a lifetime for under $100, especially if you get a digital one since there's no moving parts to break.
So why spend $5,000+ on one? I mean, yeah you might want to get something fashionable and shiny, but that doesn't require a $5,000 purchase.
I feel that the only reason to spend $5,000 on a watch is so that you can show off to other people that you can afford to piss away $5,000 on a watch, which is just silly.
Most people who have some amount of money spend it on things that aren't strictly utilitarian.
Joking aside, there are people who refuse to ascribe anything BUT utilitarian value to things as a sort of anti-consumerist view. Going to be hard to convert them.
(Casios are rated between and 1 and 0.5 secs/day, while a Rolex Chronometer is rated to 2 secs/day. High end quartz watches that cost thousands can be rated to 5 secs/yr. Of course a phone that supports NTP on a network should be at least as accurate as that.)
So the only reason for buying an expensive watch is to signal that you can afford an expensive watch. And if you're going to do that, you might as well have a piece of solid gold surgically implanted in your forehead.
If that's ridiculous - and it is - why is it any more ridiculous than spending tens or hundreds of thousands buying a watch that may well be ugly, inelegant, bulky, or even vulgar, and isn't even outstandingly good at being a watch?
There certainly is signaling for many people's purchases of high-end watches (moreso with Rolexes which are easily recognizable compared to some "better" or more expensive brands... Pateks generally are quite understated) but some people appreciate the esthetics, or the intricacy of the mechanics. And really, if you do have money, is it really different from collecting stamps (even less utilitarian value, generally) or classic cars (yeah, you can get from point A to point B, but with far less comfort and safety than in a modern econobox) or anything else?
Not everything in the world is about purely utilitarian value.
(In all seriousness, one of the most common ways I check the time, besides my phone unlock screen, is checking how much sunlight I have left by the "1 hand above the horizon = 1 hour" method.)
There are social and political circles in which demonstrating the ability to piss away money without caring is the only way to rise in status/power. You think it's silly, and from a standpoint of pure utility, that may be true. But it doesn't make it less important to the people who move in those circles.
I'm not a fancy watch buyer but I'll try to explain some of the thinking.
To luxury buyers, it's not a "watch". Instead, it's "jewelry for the wrist that just happens to tell time."
Therefore, explaining the technical superiority of the quartz crystal accuracy of a $10 Casio watch compared to the mechanical springs of a Rolex watch is an ineffective critique. It's not even relevant that the Rolex keeps time less accurately.
That's probably the best description I've seen for appreciation of expensive watches.
FWIW though, if you were to wear a knock-off of a luxury brand with your fancy suit at some event, would anyone even notice without taking a close look to specifically examine your watch?
The highest revenue share I saw was for a fake Rolex watch (which was marketed as a fake!), which had a 50% revenue share.
usually it is noticeable by taking a [even not so close] look at the wearer :)
For example, looking at that guy in his "fancy suit" an idea of knock-off would never ever cross your mind :
https://www.nytimes.com/2012/04/06/world/europe/in-russia-a-...
https://thelastpsychiatrist.com/2011/11/luxury_branding_the_...
So, 5k, no, a couple hundred... yea, if it's made well enough.
I really ought to go get it fixed... I smashed the glass with one of my rings. :(
This is everywhere and unfortunately a somewhat important social dynamic. I mean, what do you really think an MBA is? It's someone who can prove they can not work for two years and throw away $100k+ to party. And Goldman/McKinsey want to hire people who are part of the social class that can do that.
Here's the disconnect you're struggling with: you don't value watches. Or more accurately, you don't appreciate them beyond simple utilitarian timekeeping. That's fine, most people don't really care about them. Instead of trying to relate to people who buy expensive watches by valuing watches - which you clearly don't - relate to them through the broader experience of spending a lot of money on a hobby.
Do you have any hobbies you spend "a lot" of money on, perhaps more than what's required just to engage with the hobby? Keep in mind that "a lot" is arbitrary. I have a friend who spends thousands of dollars on card games. I don't see the appeal, but it makes him happy and trading card games can be a fun activity. That hobby "doesn't require" a purchase of the most expensive, collectible versions of various cards, but people do it anyway. I'm pretty sure my friend doesn't do it to signal that he can spend that money :)
The point is this: what's expensive for one person is affordable for another, and what's valuable for one person is frivolous for another. There's not much beyond that. It's all relative - in principle it all comes down to whether or not you spend strictly more than you need to on a thing so you can enjoy it beyond its raw functionality. If you do, then you're no longer treating that thing as a tool, you're treating it as a form of art. Like all forms of art, expensive watches are polarizing and subjective, and they attract a subculture of people who discriminate between things which seem utterly arbitrary to people who don't appreciate them.
I mean, I don't mind if others have such hobbies -- to each their own. As a matter of fact, I have some friends, too, who are into collecting expensive watches. Yet, I still don't get it, just like in the grandparent comment.
Your imagination needs work. Being on HN, I'd assume that you have at least one hobby that necessitates a significant amount of electronics (gaming console + TV, monitor + PC, laptop). Any one of these (if you actually care about the hobby) will run you thousands of dollars.
You'll probably dodge at this moment and say how necessary or important or utilitarian all those things are, but that's just because you like your hobbies and don't like other people's.
I'm not sure I see the distinction between "wearing it" and merely "owning it", as they both seem somewhat passive activities (if you'll pardon the oxymoron).
In other words, I'm asking, is the hobby one of collecting (as with stamps or coins), or is there something involved in the wearing that is the fundamentally interesting/engaging part of the hobby?
Perhaps what most commenters (including me) are skeptical of is that hobbies have also been known as "pastimes" and are, presumably enjoyable, ways to pass the time.
I suspect that most here would agree that for "expensive" hobbies, such as high-end computer gaming, automotive racing, or aviation, they would still participate in it and call the hobby by the same name if they didn't personally own the equipment necessary to engage in their chosen activity (and merely had unrestricted, or even shared/restricted, access to it).
I'm not so sure this is the case, however, for something like art collecting. If that person doesn't get to keep the art, isn't that really just an art buyer, not a collector?
I am, indeed, surprised by that, but only, again, because it seems passive. Is there more to it, like being seen? Seeing others' reactions? I'm genuinely curious.
I also suspect you're unusual, which is why I was hoping to hear from the original commenter. I could, of course, be quite wrong.
> If there was a service where I could wear different watches without owning them I would be all over that.
I did a web search for "luxury watch rental" and found something at least vaguely similar. If those services aren't what you're looking for, maybe that's a business idea, along the lines of pooling/sharing private jets.
> If I could only own watches to display them in my house and never take them out I wouldn't bother.
Seems like a false dichotomy. However, it's closer to the actual practice (as I understand it) of owning multiples units but only ever wearing one at a time.
Of course, I'm lumping "collectors" in with "wearers", but that's partly because it's so difficult to distinguish from external observation and partly because some commenters have described watches as art, something which doesn't generally have an activity it can be used for.
Jaeger-LeCoultre owner here
I tried the Ultra Thin, but I found it was a bit too thin for my wrist.
i see what you did there, you rascal--use a forum where people might care about such signalling and make sure they will know your watch in the future, so when they see it on your wrist, they'll wish they were you.
-- non-watch wearer (see how much cooler i am for not caring?)
And when it comes to the hobby of expensive watches...you get nothing but an expensive watch.
Every other hobby, you get something.
PC gaming? You've got games you can play, and a monster computer that can run them with beautiful graphics.
Card games? You've got a collection of cards and can quickly build new decks to adjust to the changing meta.
Model trains? I've seen some really impressive miniature towns people have built around a model train set.
I just don't understand expensive watches.
> Here's the disconnect you're struggling with: you don't value watches. Or more accurately, you don't appreciate them beyond simple utilitarian timekeeping.
That sums it all up pretty well. If I'm spending a lot of money on something, I want there to be at least something useful or enjoyable that I'm getting out of it, beyond the enjoyment of simply having it, which typically is not something ever feel about things. Things are just things. The only value they have IMO is their utility.
(Though I would certainly attach sentimental value to something that was made by hand by a relative and passed down)
And like art, it has a robust secondary market, which means some of the rare ones can go up in value, sometimes by a lot. People don't buy art because they get something, they buy art because they simply appreciate it.
Everybody is different. I'd pick a thousand dollar watch over a MTG collection or a gaming tower any day (mostly because I don't think gaming is valuable at all)
So it is with watches (or anything else, really). You think that the enjoyment of a watch is simply having it, but that's not how the hobby is enjoyed by its enthusiasts. Watches like this are enjoyed by talking with other collectors, admiring the movement, geeking out over the features ("complications") built into the watch, commiserating over ingroup gossip, etc.
It's not for everyone, and I don't blame people for not "getting" watches! The subculture might be somewhat inscrutable from the outside, and it can be easily dismissed as an idle fancy for the rich, but there is a lot more depth to it than what you're seeing.
Take your moral relativism and shove it.
Maybe your judgementalism is as much a problem as their relativism?
And, by the way, the point about "relativism" wasn't about moral relativism at all.
Here's someone with $1M. They give away $25K in a way that saves a dozen lives. They also spend another $25K on a watch. Are you outraged? Are you more outraged than the previous example because they wasted money on the watch? (Is that better or worse than keeping the money in the bank?)
Here's someone with $1M. They give away $975K, saving 468 lives. They take the last $25K and spend it on a watch. Are you outraged because they didn't also give away the last $25K? Does the watch blind you to the good they did? Or did they have to give away all $1M to avoid your "perfect contempt"?
See, you're judging their selfishness by the one purchase, not by the whole of their economic activity. I dispute whether that is a relevant metric.
But rest assured - given your demonstrably comprehensive knowledge of my altruistic habits, I'll make a note to consult with you about which particular lives I should deign to save the next time I'm considering funding one of my hobbies. I'm sure playing messiah and saving "a dozen lives" will be even more satisfying to my narcissism than shiny things; thanks for the suggestion!
The majority of the point is signaling, yes. To determine whether or not it is silly, you need to consider the goals.
A majority of the point of college for a lot of people is also signaling. Is that silly? Again, it depends.
You may dislike comparing an expensive watch to an education, but there are people out there with a lot of money who care a lot more about your ability to look like their wealth-peer than they do about your education.
I'd rather have the education, too, but there are lots of people in the world who don't work that way.
(I have a couple nicer-than-cheap watches. One is due to features, the other is just gorgeous. Neither was anywhere near $5k.)
Wealth generally signals success, and if you're successful no one cares about your education. Formal education also doesn't mean intelligence. You can be super smart and have no degree, and be successful.
I feel like you chose a bad example. Designer handbags for instance, seem to be more geared towards status symbols, although I am sure there are exceptions.
A chris reeve sebenza is an example of an item that is desirable primarily because of it's craftsmanship and only secondarily due to its price. If you own one, the chance of someone else being aware of its value is practically zero.
What's even more silly is your ignoring that fact.
So-called status symbols are actually quite effective at getting people to pay attention to you, which is kind of important if you wish to compel them to do things.
If that's true - and it seems to be - that strongly suggests politics and economics are superficial and essentially trinket- and appearance-driven, and only very distantly related to genuine achievement or merit.
IMO that's not just a problem, it's a disastrous failure of spirit, ethics, and imagination. It's fine if your institutions and values are operating at a pre-rational barely sentient level, but if you're trying to aim higher, it really isn't such a good thing.
How is any of this new information? It's so well-known we've even got a silly name for the "power suit".
However, the fact that something with so many small moving mechanical pieces can actually function still blows my mind to this day.
Not quite.
Though the only other one that can be a status symbol to any significant degree (among the assumed demographic) is a class ring--assuming you went to an "appropriate" school.
Alternatively, to hell with "acceptable", wear the jewelry you want to wear.
Considered as an informastion and signalling good, Veblen goods start more closely resemblin Giffen.
I have seen people turn down free software because they mistakenly believe an expensive program must be better. But that's not really the same, since that isn't a form of showing off.
The only instance I can see where this might be true is with the Gold Apple watch (and that’s obviously not a purely software issue):
http://uk.businessinsider.com/apple-watch-edition-sold-out-i...
But in general I can’t really see this...
This old piece of common wisdom is probably mostly obsolete now that software is generally sold as a subscription...
"so, you are're just packaging $500 of speakers in nice boxes and selling it for $80K?"
"you don't understand. The people are paying for the price."
A lot of that, and a lot of the remarks on this page, seem to have to do with a glamour of money, a faintly sexual worship of money. And the 'love' in that seems love of themselves, and not in a good way.
My father-in-law's like this. Every time he visits he tells us all about his home theatre setup and how he's spent $15k on this component and $20k on that other component, and that it was a bargain because it usually costs $35k but he got a good discount because he's friends with the store owner. You bet he is, with the stuff he buys! But hey, it makes him happy.
I collect camera lenses for example and see people drop crazy money on old Leicas. And they are nice lenses but it's such a stereotypical choice that I can't help but negatively judge anyone who actually buys or aspires to them. Their brand's mystique has cheapened them for me. And let's not even get started on Hasselblad...
The good jobs and appreciating real estate, admittedly limit how well this theory fits together, but a big HCOL city is prestigious and exotic in large part because of, not despite, its price.
1. Jobs 2. People 3. Events/activities
You can pay the San Francisco premium and have a massive job market, a million people to befriend/date/learn from/etc, and thousands of activities and experiences to engage in constantly. Or you can live in a small town with far fewer job opportunities, far fewer people, and far less to do.
Small town life is not a bad choice if it's what you want. But if you want to live in a lively city, you're going to pay for it, because a lot of people want that life and you're competing with them for a space to do it.
Now, if you're talking about Palo Alto, maybe.
As I said, I'm grasping a bit because I'm not sure I fully grok it. But there is something that would be lost about Manhattan if it became cheap. I believe it's not just the three items you list, but also the concentration of people that not only want to, but crucially, can afford the price of entrance. Beverly Hills comes to mind as an example, why do the rich and famous want to live there if not to also be surrounded by other rich and famous? Perhaps that's closer to the common link you mention in Palo Alto.
I will concede that for some portion of people, the prestige of living in San Francisco is a part of the draw. There are other factors that are probably more important for a lot of people, though. Comparing to Houston, San Francisco is literally 5 times as densely populated, which changes the feel of the city drastically. Houston is larger in terms of population, but it's also massively sprawled. That sprawl drives down the price of homes but also makes much of the city feel like the suburbs (probably; I have not visited).
Houston also spends >100 days/year at >90F, which makes it not comparable to a coastal city for people who do highly value temperate weather.
Urban rankings are quite surprisingly durable, with the US being among the worse examples of this, given, say, the rise and fall of numerous formerly-great cities, say St. Louis or Detroit, or to a lesser extent Boston or Philadelphia.
Globally, Rome, London, Paris, Tokyo, and other major metropolises have sustained themselves for centuries. In cases, millennia.
The Bay Area's biggest risk is likely its high cost of living given induced housing constraints. If an alternative centre emergess, as Los Angeles did in the 11920s, following the 1906 fire and earthquake, plus San Francisco's transport and water limitations (neither the bridges nor Hetch Hetchy existed at the time), as well as LA as a resource hub (oil). That advantage remained until the 1990s defence contraction, which hammered Los Angeles.
If you really want to see durability of prestige, though, look to universities. Virtually all the great mediaeval European universities remain notable, and several (Oxford, Cambridge, Paris, Leipzig) remain world-class. In the US, Harvard and Yale (among others) pre-date the country itself. Even in California's public university system, founding campuses Berkeley ("Cal") and UCLA, founded in 1868 and 1919, respectively, greatly out-rank subsequent expansion campuses.
(UCSB, 1944, Riverside; 1954, Davis, 1959; San Diego, 1960; Irvine, 1965; Santa Cruz, 1965; Merced, 2005. UCSF medical school, 1873, is not a general-education campus.)
Veblen goods are an information adjunct to a complex state that the buyer wishes to communicate more clearly. In this, they're related to a broader Gresham's Law dynamic, where the complex state is a "good coin", and the Veblen good makes communicating the "coin's" value, and differentiating it in the marketplace, more effective.
Though there may well be a rents dynamic to this as well.
HCOL cities, where housing decisions and dynamics are driven by earning rather than signalling characteristics, are rents, but not information goods in the sense of Veblen.
(A high-status, marquee, mansion or apartment more closely resembles a Veblen good, though for signalling purposes this cannot apply to an entire regional housing market.)
They exist where the underlying trait being signalled is difficult to communicate clearly or effectively, a circumstance especially true of social status signalling. Paradoxically, the hyperwealthy need not signal so loudly (they themselves are sufficiently well-known), but as one descends the ranks, say, below the top ten and above, say, the 90%ile (higher or lower as you prefer), that signalling becomes more necessary and costly.
This is similar to a whole set of fad-driven behaviours, ranging from speech and etiquette to clothing, diet, music, politics, management, and programming fashions, where the underlying domain is complex. Eventually the faad itself becomes dominated by poseurs whose false affectation dilutes the signal.
https://old.reddit.com/r/dredmorbius/comments/62uroa/clothin...
Related, diamonds & gemstones, and loss or clear signalling effect as inexpensive alternatives emerge. See earlier:
https://news.ycombinator.com/item?id=17183929