A humble sleeper-class train ticket from Chennai to Delhi might cost barely ₹1,000, while a seat aboard an airline for the same destination could easily swallow at least ₹13,000. Nearly thirteen times higher. And yet no reasonable soul would name the disparity absurd or extravagant.

For, the flight does something the train cannot: it is folding the distance and compressing time. Here the premium price is no caprice. What the traveller purchases is not just a seat, but comfort, speed and something irrecoverable, something that eludes even the grasp of billionaires: time.

Now let us descend from the skies to the earth. Vroom… Chennai-Bengaluru Highway. Two cars race along the same ribbon of asphalt. One costs ₹4 lakh and the other ₹40 lakh. A tenfold difference in price.

Both battle the same traffic snarls, pause at the same signals, halt at the same toll plazas and arrive in Bengaluru at roughly the same time.

Yet one carries a price tag large enough to buy nine more cars. Engineering, leather upholstery or horsepower explain only part of the story, but much of it lies elsewhere.

The extra cost purchases something far more curious: visibility, prestige and status. Human beings do not merely consume, but also communicate.

A luxury watch displays far more than time. A designer handbag carries more than just belongings. A premium bungalow shelters far more than its occupants. Sometimes the product itself fades into the background.

The physical object costs only a fraction of the price; the rest buys an invisible narrative wrapped around it: a quiet signal of status, prestige and the world you belong to. This illusion is what I call the “Veblen Veil,” which hides a harsh reality: it drapes itself over the aspiring middle class, blurring the line between real wealth and ‘luxurious’ lifestyle. More than a century ago, American economist Thorstein Veblen identified a strange paradox at the heart of human behaviour.

For most goods, a higher price cools desire; we buy less as things grow dearer, whereas certain products become more desirable precisely because they are expensive. For such items, the price tag ceases to be a barrier to demand, becoming part of the attraction itself.

The Veblen Effect reaches far beyond luxury cars and designer handbags, quietly shaping household finances, borrowing habits, and even public policy. Families stretch their budgets and sink into debt to host lavish weddings, chase branded lifestyles, or buy duplexes filled with more rooms than their lives have room for. These choices are collective rituals, each a ‘status coronation,’ wherein families crown themselves with debt to broadcast a lifestyle they cannot afford.

And therein lies the danger: this pursuit of prestige has no finish line. As more people acquire the symbols of prestige, they cease to feel special. Society then raises the bar, creates new markers of status, new aspirations are born, and the race begins again.

The ultimate irony of the Veblen Effect is that the very things designed to signal wealth actively hinder its accumulation, as tomorrow’s real wealth is sacrificed for today’s fleeting applause.

That ₹40 lakh luxury sedan does not merely cost ₹40 lakh. Hidden within its price tag is an opportunity cost: the crores of rupees that money might have grown into over the decades had it been invested and allowed to compound.

A lavish wedding is celebrated and photographed, but its opportunity cost is rarely photographed: the gold not accumulated, the land not purchased, the investments not made, or the retirement corpus that never had the chance to grow. A sprawling bungalow competes with liquidity by locking a large portion of wealth into bricks and concrete. The extra rooms may stand silent for years, but the maintenance bills or property taxes rarely do. The tragedy of many status purchases is not merely what they cost, but what they fail to create. They consume capital without necessarily producing income, productivity or future wealth.

And the debate does not end here. In a developing country, should success be measured by status consumption or by the ability to withstand economic uncertainties? Does success lie in luxury cars and grand displays of wealth, or in the quieter foundations of prosperity: savings, investments, education, skills, adequate health insurance coverage and financial security? For a rising nation like India, the answer to this question will define the future. True prosperity will arrive not when more citizens display status, but when more citizens build enduring wealth.

(The writer is an NISM & CRISIL-certified Wealth Manager and certified in NISM’s Research Analyst module)

Published on June 14, 2026