Men with increased testosterone levels are more likely to choose prestige brands over practical ones, even if both products are of equivalent quality, according to a new study co-authored by Ivey Business School professor Amos Nadler.
The luxury buys are a way to display status, Nadler said, in the same way a bird’s plumage is a signal of fitness to females and competitor males.
Put another way, the Ferrari in the driveway may be the human equivalent of the peacock’s train of iridescent feathers.
“It’s like saying, ‘look at me. I have resources and other males should recognize me as a high-rank and females should recognize that and be more interested in me because of my rank and because of my status,’” he explained.
The study is newly published in Nature Communications and was a “major multi-team effort” that included Nadler and researchers from Caltech, the Wharton School at the University of Pennsylvania and INSEAD in France.
The study enlisted roughly 250 men who were given a gel that either had testosterone or a placebo.
Four hours later, the group took a series of tests that asked their preference for a variety of items that had been pre-ranked for status perception by a previous study group.
In the testosterone study, those with increased levels of the hormone showed preference for the luxury items, even if the quality was similar, opting for Calvin Klein jeans instead of Levi’s; Armani ahead of North Face; Lacoste instead of Old Navy.
And those choices were even more remarkable when participants were asked to rate preference for a single item, based on advertising descriptions that suggested either status, power or quality.
One watch, for example, was billed as robust, state-of-the-art technology and well-engineered in one ad, and, in another, the same watch was described as indestructible, powerful and an exceptional performer.
But men with the added hormone still gravitated towards the watch with an ad touting its prestige, luxury and world-renowned style and reputation.
“The hormone was able to shift preferences strongly towards status, over the other ones,” Nadler said.
It’s an echo of what happens in nature, for example, with the size of a stag’s antlers as a visible-to-all display of fitness and competition over rivals.
“The analog in human society – in Western materialistic culture – is if you’re driving a Ferrari it’s hard to fake, versus driving a bicycle or driving a station wagon. We show each other where we rank in the social ladder primarily based on the things that we own.
“This (Ferrari) shows you’re the leader of the pack, you’re at the top of the heap. People admire people who drive nice things.”
People make deliberate choices about the products they buy, and that $100 branded T-shirt speaks ‘wealth’, even if the wearer had to go into debt to buy it, he said.
While the findings could be an advertiser’s dream, they should also be a cautionary tale for consumers about the potential wastefulness of spending so much to send messages of apparent affluence.
Less expensive goods “could have the same functional value as their high-status counterparts,” according to the study. “Status consumption therefore creates inefficiencies. Spending resources to elevate perceived status might, for instance, perpetuate poverty by reducing self-investment in health and education among the poor.”
Nadler said people should “think big-picture” about whether buying luxury goods generates the highest rate of return. Maybe the Rolex gets them the date or the job promotion, but more likely, it just builds more personal debt.
“The point is that people spend so much of their income in those status signals. Their bank accounts are empty, but their closets are full of things they’re using to signal the world of their affluence.”