Everyone who opts to buy a counterfeit luxury item has their reasons. It might be too good to resist when a deal pops up, as might the thrill of tricking someone and briefly climbing a few tiers on the social ladder.
But researchers think there’s another reason behind a recent demand surge for fake luxury: a fight against rising income inequality.
A study published by City, University of London found that as perceptions of income inequality increase, consumers will increasingly covet fake luxury goods for their “egalitarian value,” in other words, a good’s ability to restore equality in society.
Academics at City, Stockholm School of Economics, and Harvard Business School surveyed 2,000 participants in the U.S. and Sweden, examining their perceptions of hierarchies and thoughts on inequality to find a new driver of counterfeit buying.
“The egalitarian value increases consumers’ motivation to purchase counterfeit luxury goods beyond their hedonic, utilitarian, economic, or status signaling value,” the authors wrote.
Let them wear handbags
France, the final resting place of Marie Antoinette, is also home to some of the world’s largest fashion houses, including Bernard Arnault’s behemoth LVMH and Gucci-owner Kering.
Like Antoinette, these affluent fashion houses are facing a reckoning from the general public as inequality comes into the spotlight.
In January, LVMH-owned Benefit Cosmetics was reportedly in talks to team up with TikTok parent ByteDance to stop a surge of counterfeits popping up on the platform.
In the run-up to the Olympics, Paris police have been hard at work trying to prevent a flurry of counterfeit operations around the city.
The cost of living crisis pushed inflation into the double-digits and hammered disposable incomes, making counterfeits more attractive as consumers opted for simple luxuries.
While price incentives to buy counterfeit goods have increased since the cost of living crisis, so too has inequality.
Studies show that poorer regions experienced higher price rises, while lower-income households spent more of their income than the wealthy on inflationary items like food.
As payback, it seems young people are starting to popularize counterfeits, helping them shed their cache of exclusivity.
Researchers also looked at a person’s “social dominance orientation,” or the extent to which people support hierarchical structures in society based on things like wealth.
People who scored low on this test and were accordingly less likely to support social hierarchies were more likely to get a higher sense of egalitarian value from purchasing counterfeit goods.
“We think this research is particularly interesting as it links growing inequality to “deviant” forms of consumption – such as buying counterfeit luxury goods, suggesting that buying counterfeits is not driven by economic reasons per se, but to achieve a sense of social equality,” said Stockholm School of Economics assistant professor Dr Wiley Wakeman.
“It also begs the downstream question as to whether mechanisms that increase brand exclusivity – such as maintaining waitlists for luxury watches or handbags – may counterintuitively manifest the egalitarian value in and the consumption of counterfeits, explaining why consumers might buy these goods.”
The real cost
While consumers may, at least implicitly, think they are addressing inequality by opting for a counterfeit Prada or Dior, they’re quite possibly doing the opposite.
Because they are illegal, counterfeit goods are produced in environments with severe levels of labor exploitation, the United Nations Office on Drugs and Crime says.
“They threaten public health through the production of fraudulent medicines; they deprive the public sector of tax revenue through bypassing official channels; they add to public spending through increased law enforcement work to counter this illicit trade; and they increase the price of legitimate products as companies seek to recoup their losses,” the UN says of the criminals orchestrating counterfeit rings.
While it’s tempting to view the purchase of counterfeit as a subversive act in the fight for equality, those tempted may consider the risks of getting caught and instead think of other ways they can help bring down the Gini Index.
