Interpersonal Effects on Consumer Demand in Economic Theory and Marketing Thought, 1890-1950

In late nineteenth century, theoretical explanations of consumer demand were derived from neoclassical microeconomic analysis developed by Alfred Marshall in his Principles of Economics 1890. Neoclassical theory, however, was of limited use to market analysts because it took no account of importance of interpersonal effects on consumer choice and could not offer an explanation of increasingly strong influence of social factors, in particular desire for status, on purchase decisions. Marshall effectively ignored status-driven consumption in first edition of Principles. He acknowledged the unwholesome desire for wealth as a means of display that was increasingly in evidence (particularly in United States during Gilded Age), and he condemned such expen