Mixed signals of status: luxury consumption shapes competence and warmth impressions through different routes

Individuals engage in luxury consumption to signal status and realize the benefits of higher status. Research on how observers explain luxury consumption is limited. In Study 1 within a social interaction context and Study 2 within a social media context, luxury consumption increases perceived competence and reduces perceived warmth. Perceived status mediates the effect of luxury consumption on increased competence perception. Study 3 compares the effects of mere wealth and wealth plus luxury. Luxury consumption further reduces perceived warmth, with no effect on perceived competence. Study 4 shows that inference of status signaling motive drives the decreased warmth impression of luxury consumers. In sum, luxury consumption increases competence perception through perceived status, whereas it reduces warmth perception through status signaling motive inference.