Study Explains Latino Fascination With Crap

In an effort to explain why Latinos and Blacks spend more money than their white counterparts on crap like, you know, $300 pairs of sneakers and getting those gaudy fake nails, the National Bureau of Economic Research in New York did a study. Here’s what they found:

Aside from simple differences in preferences, signaling is one possible explanation. Suppose that high income confers status. Other people judge your income based on your conspicuous consumption and your group’s income. Under plausible conditions, the authors show that if your group’s income is already high conspicuous consumption has a low marginal product. Put differently a black man who wears a very expensive suit gets a bigger increase in status than a white man who wears the same expensive suit because the baseline income prediction is lower for the former.

That’s why we only hang out with spics in suits.

MarginalRevolution.com”>Politically Incorrect Paper [MarginalRevolution.com]