Now All We Need Is a Study on Pound Cakes and Police Shootings.

Legendary comedian and classist bourgie Negro icon Bill Cosby once infamously criticized poor black folks for spending all their money on $500 sneakers instead of educational toys and claimed they had mixed-up priorities. A backlash ensued.

According to Slate‘s Ray Fisman, who points to a new study about race and consumer tendencies, Dr. Huxtable is right, but he is wrong about why.

Every society has had its equivalent of the $150 Zoom LeBron IV basketball sneaker, and thanks to Thorstein Veblen, we have a pretty good idea why. As the Gilded Age economist famously put it, “conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure,” and “failure to consume a mark of demerit.” To consume is to flaunt our financial success; it’s how we keep score in life.

Economists refer to items that we purchase in order to reveal our prosperity to others as wealth signals. But why use sneakers, as opposed to phonics toys, as a wealth signal? First off, for a signal to be effective, it needs to be easily observed by the people we’re trying to impress. This includes not just those near and dear to us, but also the person we pass on the street, who sees our sneakers but would have a harder time inferring how much we’re spending teaching our kids to read. For a wealth signal to be credible, it also needs to be hard to imitate—if everyone in your community can afford $150 sneakers, those Zoom Lebron IVs would lose their signal value.

Fisman says that black families and white families bringing in the same income are competing with two different groups in this game. A black family making $42,500, the median income for black households in the 1990s, can stretch itself thin but still afford to buy nice rides, fresh kicks and the like with the Jenkinses. But a white family making the same $42,500 is competing with white families — whose median income was $66,800 in the 1990s — so instead of competing with neighbors who make too much money to keep up with, they opt out and don’t play at all.

To test their theory, [the study’s authors] look at how much a white family spends on conspicuous consumption when it is surrounded by white families making a similar amount of money. They find that this white family spends the same portion of its income on visible goods as a black family surrounded by other black families with similar incomes. They also find that the further a family of either race slips behind the average income of nearby households of the same race (becoming too poor to compete in the signaling game), the less it spends on these visible goods.

Once these effects are accounted for, racial disparities in visible consumption disappear. It’s not that black Americans are more inclined to signal wealth; rather, poor blacks are more likely than poor whites to be a part of communities where they are relatively rich enough to participate in the signaling game…

In his controversial speech, Bill Cosby appealed to the African-American community to start investing in their futures. What’s troubling about the message of this study is that Cosby and others may not be battling against a black culture of consumption, but a more deeply seated human pursuit of status. In this sense, Cosby’s critics may be right—only when black incomes catch up to white incomes will the apparent black-white gap in spending on visible goods disappear.

The study goes on to say that blacks spend about 50 percent less on health care and 20 percent less on education than white families of comparable incomes. It’s possible that disparity can be attributed to the very complicated relationships that black people have with institutions like hospitals and schools. And comparable incomes doesn’t mean comparable situations, and I wonder if black people making $______ a year are less likely to have medical insurance than white people making the same amount.

The education number is a little harder to make sense of. Not to discount cultural factors, but it’s probably very likely that black folks live in places where the costs that are concomitant with schooling are lower. But that’s just a guess.

Any economists or sociologists out there wanna offer up their thoughts?



Gene "G.D." Demby is the founder and editor of PostBourgie. In his day job, he blogs and reports on race and ethnicity for NPR's Code Switch team.
  • Aisha

    Research is so funny. I took a class on racism as a health issue nearly 10 years ago where we discussed this very issue. Why don’t people of color spend their money on healthy foods instead of other things? My professor came up with the same answer as these economists. But it only counts if you publish in a peer reviewed journal.

    There was banter back and forth. One students exclaiming “Well they can afford whole foods if they really want to.” I’m not sure why people think they can change others values. What we value usually gives us cache in our social environments. No one in my environment needs an Escalade on 22’s. But she might need a Lexus truck and when she steps out of the car she’ll be carrying a Louis Vuitton.

  • Right. I think it’s safe to say that education itself can be a commodity and a wealth signal; Manhattanites trying to get their kids into elite elementary schools are competing with their peers for status, too.

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