A platinum credit card is typically associated with high social status, but new research suggests that people will choose one of these cards because it signifies higher income “over and above its benefits. Economists worked with an Indonesian bank that markets platinum credit cards to high-income customers. “Demand for the platinum card greatly exceeds demand for a nondescript control product with identical benefits,” according to their working paper distributed Monday by the National Bureau of Economic Research, a Cambridge, Mass.-based research group.
What’s more, the higher your self-esteem, the less likely you will need flashy credit cards. Cross-referencing spending habits with psychological tests, the researchers found that increasing self-esteem causally reduces demand for status goods. “Social image is a substitute for self-image,’ the researchers said. “Demand for status is psychological in nature.” The working paper was carried out by economists from the University of Chicago, The World Bank, Sao Paulo School of Economics, Harvard University and University of California, Los Angeles.