D11 - Consumer Economics: TheoryReturn

With Saudi Arabia's tendency to implement a policy of economic openness to the world from the early 1980s, the phenomenon of conspicuous consumption (society of consumption and imitation) has increased. Due to the adoption of the concepts of economic globalization, changing consumption patterns, tourism and travelling and the spread of multi-national companies which market and promote their products over different mass media, this phenomenon has remarkably gone up. Over time, the effects of this phenomenon have spread to low-income groups, especially young people, and it has been a motive for some young people to earn money illegally to afford it. In addition, banks and financial institutions are providing financial facilities to individuals to finance unjustified conspicuous consumption. This paper aims to identify the concept of this phenomenon at the social, economic and cultural levels. It aims to clarify the most significant factors affecting this phenomenon and its subsequent economic and social effects and risks. Then, it provides suitable recommendations to curb this phenomenon spread in the future. This paper conducted social survey via a sample questionnaire for (300) respondents in three different areas in Saudi Arabia. The survey was conducted during the period from January 2023 till September 2023. It has used also Household Income and Expenditure Survey by General Authority for Statistics (GASTAT) in Saudi Arabia (2007, 2013, and 2018). The results of this paper indicate that social status and the dominance of customs and traditions, bank facilities and installment sales play a major role in increasing the phenomenon of conspicuous consumption in Saudi Arabia. This paper recommends rationalizing conspicuous consumption to reduce its negative economic effects in the future, achieving efficiency in the use of resources, reducing waste, and spreading the culture of saving and investment in Saudi society.

The American financial crisis, which started in 2007, triggered subsequently a global economic decline. To boost the decreasing national economies, many countries introduced various stipulating measures. The automotive industry has been among the numerous fields, which were affected by the decline. The proclaimed importance of this industry led to the introduction of a new economic tool to support the short-term consumption, usually referred to as the car scrapping scheme. This scheme stands for a special incentive to purchase a new car. Usually, the incentive is introduced in the form of a direct financial support or an ex-post tax relief, and is conditioned by scrapping the applicant's old car. The microeconomic analysis of consumer behaviour proved that the car scrapping scheme can mitigate the maximum decline of the aggregate consumption, thanks to the shift of the consumption line and of the map of the indifference curves. However, the car scrapping scheme has many other impacts, whose research should be elaborated.