Psychological Landscape of Consumption: Examining the Nexus between Self-Esteem, Dunning Kruger Effect and Conspicuous Consumption for Gen Z

Abstract

Consumption is an essential tool for an individual to express themselves in society. One crucial consumption pattern to consider in this situation is conspicuous consumption. It is possible to discuss numerous psychographic factors that influence an individual's consumption behavior. In this context, individuals may use consumption as a tool to bridge the gap between their ideal and real selves, thereby building self-esteem. Based on this conceptual framework and the current literature, conspicuous consumption behavior may be a choice an individual can make to increase self-esteem. This study examines the moderator role of the Dunning-Kruger (D-K) Effect in the interaction of self-esteem and conspicuous consumption. Considering the variables, the research is interdisciplinary, drawing on the literature in psychology, microeconomics, and consumer behavior. The research examines how the interaction between the dependent and independent variables emerges in the moderation of the D-K Effect, a self-assessment failure, within the Gen Z population. Finally, the analysis found that a high level of D-K moderates the effect of self-esteem on conspicuous consumption.