Last week, my neighbors and I gathered on our street to discuss the possibility of hosting a block party this summer. It was a warm evening, with a cool breeze that seemed to be keeping our spirits high. We had just started tossing ideas around when one of my neighbors suddenly stood up to leave, saying that she would not be participating because a block party would only highlight differences in wealth and status across the neighborhood. 

After a brief moment of collective contemplation, friendly chatter resumed and the party planning carried on full steam ahead. But the remark got me thinking. Our neighborhood is a patchwork of large single-family homes, duplexes, and apartment complexes—and consists of a mixed bag of homeowners and renters across the economic spectrum. And so I wondered if the block party might end up becoming, on some level, a display of status for the homeowners that marginalized renters. 

This week, Kellogg’s Derek Rucker discusses one strategy that could help dampen potential backlash from the display of status symbols. 

Plus, we take a look at generosity on a global level.

A symbol of status

Over a century ago, the economist Thorstein Veblen popularized the idea that by purchasing and displaying luxury goods, people can communicate perceptions of their wealth, success, or competence.  

But wearing a status symbol can also have negative consequences, making others perceive the wearer as less warm or likable, says Rucker, a social psychologist and professor of marketing. So even though people might be impressed by the success of an individual who arrives in their new sports car, they may be less likely to actually want to be friends with them. 

As Rucker and Jesse D’Agostino—who completed her PhD at Kellogg—were researching status symbols, they had an idea. Perhaps if someone else, like a friend or a neighbor, pointed out a person’s status symbol, that could reduce the negative backlash.

Rucker and D’Agostino conducted six experiments testing this idea on social media, with a focus on status symbols that tend to be more subtle, like the lines of a Porsche luxury car peeking out of a cropped photo. They found that when someone called attention to their own subtle status symbol, viewers recognized the person’s higher status but also saw them as less warm. In contrast, when a bystander drew attention to the status symbol, the person in the post received the benefit of looking high-status without taking a significant hit to their perceived warmth. 

If you value being regarded as warm, the next time you feel like sharing a subtle status symbol, be aware that it might come at a cost, says D’Agostino. “If you want to bypass it, you could have your friend mention the symbol instead.” 

Read more in Kellogg Insight.

Measuring generosity

In a recent congressional hearing, Secretary of State Marco Rubio testified that the U.S. remains the world’s largest provider of foreign aid by far. It was a showy statement that rings true in absolute terms: The U.S. donates significantly more in total dollars of foreign aid than any other individual country. 

“I’m glad to see that this principle has not gone by the wayside, and that Rubio still speaks of generosity as a noble and appropriate motivation for foreign aid,” writes Dean Karlan, a professor of economics and finance and co-director of the Global Poverty Research Lab. 

But the country’s standing dips significantly when measuring dollars donated per capita or dollars donated as a percentage of income. Based on dollars donated per gross national income, for example, the U.S. ranks 33rd, below countries like South Korea and Romania. A similar result emerges in terms of aid per capita. 

Sometimes, Karlan says, demonstrating generosity means more than counting raw dollars alone. “Being proud of being generous, full stop, demonstrates the values that many of us share,” he says. “Let’s live up to that value.”

Read more in Karlan’s Substack post.

See you next week,

Abraham Kim, senior research editor
Kellogg Insight