The Veblen Effect: Why Higher Prices Attract More Buyers

In most markets, higher prices reduce demand. But in luxury, the opposite can happen. When something becomes expensive enough, it stops being evaluated for function and starts being judged for what it signals. Status. Access. Identity. The price is no longer a barrier—it becomes the attraction. The real insight for entrepreneurs is this: not every product should compete on affordability. In the right market, raising your price can reposition your entire brand. Scarcity, exclusivity, and perception can turn an ordinary product into something aspirational. But this only works when the story, audience, and positioning align. Otherwise, it just looks overpriced.