Driving desire: Exploring willingness to pay for a higher social status in automobiles

Abstract

Achieving social status is an important human drive. Cars often serve as status symbols and are known to provide social and psychological benefits beyond travel. In this study, we conduct a contingent valuation experiment with German car owners to assess their willingness to pay for a car with a higher social status relative to the cars owned by individuals in their social and spatial environment. Respondents' hypothetical choices are analyzed using conventional dichotomous choice methods and the spike model to investigate how status consciousness influences choices. The results of our study show that people have a marginal willingness to pay for a higher social status of their car compared to the people around them. We find a mean marginal willingness to pay for an increase in car status compared to other people between 786 and 1479 Euros.