With each passing Thanksgiving, retailers inaugurate the holiday season with increasingly larger displays and deals. The past few years have seen the introduction of “Cyber Monday” as an extension of Black Friday, as well as longer lines and more advertisements in the lead-up to the notorious weekend of steep discounts. This year, several major retailers including Walmart and Best Buy opted not to wait until the day after Thanksgiving to begin their sales, and instead kicked off Black Friday on Thanksgiving afternoon.

As we head full-force into the holidays, a new report by Ricardo Perez-Truglia, funded by the Russell Sage Foundation, provides some timely and valuable insight into conspicuous consumption in the U.S. A Ph.D. candidate in Harvard’s Department of Economics, Perez-Truglia argues that people use conspicuous consumption of market goods (such as clothing and jewelry) to signal their wealth and thereby increase the probability of obtaining non-market goods (such as admiration). The report abstract states:

Perez-Truglia is the first to exploit this relationship to measure the market value of those non-market goods by using a revealed-preference approach. He estimates a signaling model using nationally representative data on consumption in the U.S. He then uses this model to obtain welfare implications and perform a counterfactual analysis. His estimates suggest that for each dollar spent on clothing and cars, the average household obtains approximately 35 cents in net benefits from non-market goods.

Click here to read the abstract in full and download the report.