What is the Impact of Materialism on Economics ?

23 February 2011 Sören Zschoche 57 Comments Investing

Economics is a science that studies how societies share their resources to meet their needs. In this study we can see how the resources are utilized by the consumers to fulfill their desires and requirements. As they try to satisfy their needs they often incur debt and then these indebted consumers are forced to take the help of a debt settlement programs. But are you aware that materialism has an immense effect on economics in both positive and negative ways?

Growth and expenditure of the consumers

Economists at Hoover Institution, Stanford University state that the consumers spend nearly 70% of the US gross domestic product (GDP). GDP is the calculation for total economic output. The consumers are forced to spend their non-refundable income to obtain more goods due to an approach towards the economic materialism. As the demand in the market is high so the firms have to supply more products to meet the demand of the consumers that renders into economic growth. Therefore, this boosts the spending which consequently increases the GDP.

Conspicuous Consumption

Most of the consumers spend for the purpose of flaunting their wealth as this is the ultimate motive for conspicuous consumption. Materialism can be coined as conspicuous consumption. People who are in awe with materialism focus their attention to “keeping up with the Joneses,” a popular phrase for conspicuous consumption. In this situation you gauge your wealth by comparing it with your neighbor’s prosperity. In order to prove his power of wealth he will invest more money on a larger house, more expensive cars and other luxury goods.

Savings Rate is low

Consumer’s approach towards materialism instigates them to spend more to acquire more goods. Presently, people are not interested in saving as they spend their full income to purchase goods and services. The economists in the government as well as in the private sectors have cautioned about the severe impact due to the diminishing savings rate of the Nation. Capital investment is decreasing with low savings rate amongst the Americans. Lack of investment capital fails to give scope for economic expansion. In a way, the U.S economy is controlled by the foreign investors.

Consumer Debt

The psychological impact of materialism on people drives them to buy things that exceed their budget. They usually incur insurmountable debts on credit cards with high interest or huge amount of mortgage for large houses. Mortgage is taking a serious shape in the U.S economy and around the globe. People are taking out loans to buy large and expensive houses but they default with the crash in the housing and credit market. Even post recession, many Americans have come across a dangerous situation as there is lack of financial security and no job security.

Learn about Fisher Investments, one of the top investing resources.


  • Alex said:

    I think that the post shows that we all see and feel – the magic circle of working, earning –> buying, spending… This translates into bigger cars, fancy gadgets and even the size of the closets in our homes has been increasing significantly since the 60′s, making more room for the new stuff we are buying ….
    So at the end of the day – do consider what really makes you happy – buying the latest and greatest iPhone (and for that spend 2 hours more in the office finalizing your presentation) or simply being with your kids, go to park and enjoy some time with your spouse…

    You can learn more on the world of safe investments in The Safe Investment Guide.

  • Vitalie said:

    Well, that is actually a tough question. In the United States, we have a Capitalist economic system. Capitalism basically only works if people are motivated by wanting more. (This works well since people are greedy and selfish by nature!)

    So materialism should actually be GOOD for a capitalist society!

    I think the bigger problem is that the economy has been damaged to the point that people are afraid to be good capitalists. If we felt more comfortable spending (on our material wants), we would be making the economy better.

    So I guess a better question is how does our economy affect our materialism!

  • Buy Targeted Website Traffic said:

    Completely agree Vitalie. Good point

  • email bulk marketing list said:

    Both make very good points!

  • Jorge k. de cambio de cheques said:

    Los extremos son problemáticos, existen medios de manejar ambas cosas, sin encontrarse con inconvenientes económicos.

    Jorge de Cambio-de-cheques.com

  • Greg said:

    Interesting post. I’m not convinced materialism is good for the economy. If so, why are we all in so much debt? Isn’t it our out of control spending that got us in this financial slump?

  • Copper Fai said:

    Very thoughtful article! For more, please visit Daily economic news

  • Jorge k. de cambio de cheques said:

    Es fundamental aprender sobre losconsumidores innovadores,aquellos que les gusta ser los primeros en probar nuevos productos, porque la respuesta del mercado de esos innovadores es a menudo un indicador crítico del éxito o fracaso final de un nuevo producto. Los rasgos de personalidad que han sido útiles para diferenciar a los consumidores innovadores son: deseo de innovación, dogmatismo, carácter social, nivel óptimo de estimulación.
    Jorge de Cambio-de-cheques.com

  • Mark Lee said:

    I totally agree with the all above comments…Keep sharing!

  • This Week in Money Management: Will Oprah Still Control Viewer’s Money? | Credit Sesame Blog said:

    [...] — consumerism, some call it — has both positive and negative effects on the economy. World Financial Blog gives us the [...]

  • saikiran said:

    thanku 4 the information

  • Adam Ghilchrist said:

    What is the Impact of Materialism on Economics is really an impressive post which I have ever read. All the part which you explained here is really easy to learn. Seriously or not seriously I appreciate your all the hints. Thanks dude :)

  • best credit cards compare said:

    I’ve been browsing online greater than three hours nowadays, yet I never discovered any interesting article like yours. It’s pretty worth sufficient for me. Personally, if all web owners and bloggers made just right content material as you did, the net will likely be much more helpful than ever before.

  • Robert Bridge said:

    Some great topics about various investments well done and thanks for sharing.

  • Forrest Wekenmann said:

    Thanks , I’ve just been searching for info about this topic for ages and yours is the best I’ve discovered so far.But, what about the conclusion? Are you sure about the source?

  • Gio Lower said:

    What is the Impact of Materialism on Economics is really an impressive post which I have ever read. All the part which you explained here is really easy to learn. Seriously or not seriously I appreciate your all the hints. Thanks dude

  • bargains on ebay said:

    Today, while I was at work, my sister stole my iPad and tested to see if it can survive a 40 foot
    drop, just so she can be a youtube sensation. My iPad is now broken and she has 83 views.
    I know this is entirely off topic but I had to
    share it with someone!

  • Isidro said:

    Do you mind if I quote a couple of your articles as
    long as I provide credit and sources back to your website?
    My blog is in the exact same niche as yours and my visitors
    would really benefit from a lot of the information you provide here.

    Please let me know if this ok with you. Appreciate

  • Marcelo said:

    This post provides clear idea designed for the new visitors of blogging,
    that truly how to do blogging and site-building.

    my site: webpage (Marcelo)

  • Sang said:

    I’m not that much of a internet reader to be honest but
    your blogs really nice, keep it up! I’ll go ahead and bookmark your website to come
    back down the road. All the best

    My page – topeka dentist (Sang)

  • Valentina said:

    This article provides clear idea in favor of the
    new users of blogging, that actually how to do blogging and site; Valentina,-building.

  • Adrianna said:

    Howdy! I’m at work browsing your blog from my new apple iphone!
    Just wanted to say I love reading through your blog and look
    forward to all your posts! Carry on the outstanding work!

    Feel free to surf to my blog post … homepage (Adrianna)

  • Elyse said:

    It’s hard to come by experienced people in this particular subject, but you
    seem like you know what you’re talking about! Thanks

    My web blog; web site [Elyse]

  • Russel said:

    Hi there, this weekend is nice for me, because this time i am reading this enormous
    educational post here at my house.

    My blog :: web page; Russel,

  • palo alto dui attorney said:

    Thanks for your marvelous posting! I definitely
    enjoyed reading it, you could be a great author.I will ensure that I bookmark your
    blog and will often come back someday. I want to
    encourage you continue your great work, have a nice weekend!

    My blog post: palo alto dui attorney

  • chapter 7 said:

    If some one wants to be updated with newest technologies afterward he must be
    go to see this web site and be up to date every day.

  • Milton said:

    I think the admin of this web site is truly working hard in support of his web page,
    because here every data is quality based material.

    webpage (Milton)

  • psiquico natural said:

    Useful info. Lucky me I found your web site accidentally,
    and I’m shocked why this twist of fate did not took place in advance!

    I bookmarked it.

  • best linux games 2015 said:

    Games being run-in the foreground are given better control with reserved recollection to decrease surface
    swaps and other potential situations with external applications, over their approach rendering.

  • samsung s7 Water proof said:

    Undeniably believe tɦɑt wҺісh уоս ѕaiԁ.
    Υߋᥙr fаᴠοгіtᥱ јᥙѕtifіcatіοn ѕeᥱmeԁ tⲟ
    bе οn the іnteгnet tɦе еаѕіeѕt tһіng
    tߋ be aᴡɑrе оf.
    І ѕaʏ tο уοu, І сегtaіnlу ցet ігҝeԀ wһіⅼе ρeⲟρⅼе
    tҺіnk aƄоսt ԝoггіᥱѕ thаt tһeу ρlaіnlү ԁоn’t кnoѡ
    ɑbοut. Үоᥙ mаnagеɗ tο hіt thᥱ naіⅼ սροn thᥱ
    tοp and ɑⅼsߋ ɗеfіneɗ ⲟut tҺе wһοlе tɦing ԝіtһoᥙt ɦaνіng ѕіԁе-еffеcts , реⲟрⅼе
    cоսlԁ tаҝe
    a siǥnal. Ꮤіⅼⅼ ⅼікеlу bе bаϲκ
    to ցᥱt mοге.

  • http://hylipguvy.tumblr.com said:

    This is my first time go to see at here and i am truly happy to read all at single

  • i love you husband said:

    The good news is that you can prevent this from
    happening and you can create your ideal relationship by
    learning how to become emotionally available to yourself and therefore
    get yourself ready. It will not help if you fight back emotionally or
    get upset. Emotional emptiness – this is what i love you husband need
    to fill up in your ex.

  • online games with friends shooting said:

    Then you definitely will obtain crystals that could cure your winners during the game, and after that make these crystals for each four hours from then on if you perform for 4 hours.

    Then, you can get the Premium Hero Deposits by enjoying for 24 hours and then earn these crystals every 24
    horus although you play, but in order to get 24 hours of gameplay, it’ll take a
    while, therefore the game does reward you for
    the quantity that you play.

  • http://goo.yt/footpalace77760 said:

    Although it isn’t known if the strategies practiced were just like the ones which are used
    at this time, many archaeological findings suggest that the therapeutic
    massage methods had been based mostly on the identical rules.

    My homepage – athens massage and reflexology phoenix
    - http://goo.yt/footpalace77760,

  • www.999ibcbet.com said:

    Hey there! This is kind of off topoic but I need some advice from an established blog.
    Is it hard to set up your own blog? I’m noot very techincal but I can figure things out
    pretty quick. I’m thinking about making my own bbut I’m not sure where to begin. Do you have any points or suggestions?
    Thank you

    Here iss my web blog; m88 เข้าไม่ได้ (http://www.999ibcbet.com)

  • Milionário said:

    Greetings from Idaho! I’m bored too tears at woork so I decided to checkk out your ssite on my iphone during
    lunch break. I really like the information you present here and can’t wait to take a look when I get home.
    I’m amazed att how fast your blog loaded on myy cell
    phone .. I’m noot even using WIFI, just 3G .. Anyhow, fantastic blog!

  • 堺市立斎場 葬儀, said:


  • credito consolidado said:

    Very nice post. I just stumbled upon you blog and wished
    to say that I’ve truly enjoyed surfimg around youir blog posts.
    After all I’ll be subscibing to your feed and I hope youu write again very soon!

  • Linwood said:

    Ꮩеry interᥱsting subject, appгeciate it for putting up.

    Fᥱeⅼ frеe to ᴠisit my рage: iphone 7

  • mobile games on pc said:

    Find out with Creature Figures, the breeding and building RPG that will set you together with
    the Beast kingdom!

  • consolidação de créditos millenium said:

    Preetty nice post. I simply stumbled upon your weblog and wished to mention that I’ve truyly
    loved browsing your weblog posts. After all I’ll be subscribing on your feed and I’m hoping you write again soon!

  • funny bike stunts said:

    Thanks for finally writing about > World Financial Blog
    » Blog Archive What is the Impact of Materialism on Economics ?
    - Investing – World Financial Blog < Liked it!

  • myheadquarter said:

    I know this web site presents quality depending posts and extra data, is there any other site which presents these kinds of stuff
    in quality?

    My webpage myheadquarter

  • payday loans said:

    Greetings I am so excited I found your weblog, I really
    found you by mistake, while I was browsing on Askjeeve for something
    else, Regardless I am here now and would just like to
    say thanks a lot for a tremendous post and a all round enjoyable blog
    (I also love the theme/design), I don’t have time to look over it all at the minute but I have book-marked it and also added your RSS feeds, so when I have time I will be back to read more, Please do keep up
    the superb b.

  • tapicer007 said:

    Hello I am so happy I found your website, I really found you by error, while I was
    browsing on Bing for something else, Anyhow
    I am here now and would just like to say thanks a lot
    for a remarkable post and a all round exciting blog
    (I also love the theme/design), I don’t have time to look over
    it all at the minute but I have bookmarked it and
    also added in your RSS feeds, so when I have time I will be back to read more,
    Please do keep up the excellent b.

  • 内臓脂肪を減らす said:


  • drukowanie 3d said:

    It’s an awesome paragraph in favor of all the internet people;
    they will get advantage from it I am sure.

  • resep anak susah makan said:

    I’m pretty pleased to find this web site.
    I need to to thank you for ones time for this particularly fantastic read!!
    I definitely appreciated every little bit of it and I have you saved to
    fav to see new things on your site.

  • quick home Hemorrhoid treatment said:

    Well-written web site!! Through what kind of channel could I get
    in touch with the person who wrote this article?

  • 臨海斎場, said:


  • lizaczek pl said:

    Very good post. I will be going through many of these issues as well..

  • Andrew.D said:

    Very Interesting Post. Thanks for sharing!

  • polsat 6 miesiecy gratis said:

    Thank you for every other informative blog. Where else could I am getting that type of information written in such a perfect method?
    I have a venture that I am simply now running on, and I have
    been on the look out for such info.

  • 臨海斎場 said:

    東京の大田区 臨海斎場を利用して料金を抑えた葬儀をご案内しています。
    東京都 大田区・品川区の臨海斎場を利用して予算を抑えた葬儀をご案内しています。

  • zakolanówki żółte said:

    What’s up to every body, it’s my first go to
    see of this web site; this weblog contains remarkable and actually excellent data designed for readers.

  • 粉ミルク 作り方, said:


  • tubesmom.com said:

    He smiled even less when I tried to make a joke to slop
    by him and he tossed me aside like I was nothing.
    There are several ways and circustances for a brude to be “given away”, as there iis noo set-in-stone method.
    Whilst Bangkok has largeky cleaned up many of the in-your-face raunchy street haunts, it’s no secret that many men whoo visit the city strill wish to spend their time frolicking with beautiful Thai ladies during the

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.