The Utility of Prestige: Chinese and American Hedonic Ratings of Prestige Goods

ABSTRACT

China is rapidly becoming the most important luxury market in the world (Lung, 2005). The reason for this is not simply due to the market size but also to the Chinese consumer's particular penchant for luxury goods. This study will investigate the differences between U.S. and Chinese consumers based on their hedonic and utilitarian ratings of luxury goods and the relationship that these ratings have with individual and cultural traits, with the expectation that a collectivist background will lead to a more utilitarian view of prestige goods. A sample of more than 600 Chinese and U.S. respondents was analyzed based on the ratings of three prestige goods. The results show that China is rapidly becoming a more individualistic nation and that the expected utilitarian use of prestige goods is confirmed through multiple statistical techniques.