A century ago, Thorstein Veblen introduced socially contingent consumption
into the economic literature. This paper complements the scarce
empirical literature by testing his conjecture on South African household
data and finds that Black and Coloured households spend relatively more
on visible consumption than comparable White households. In an emerging
economy context, this is especially important as it carries implications
for spending on future assets. This paper explores whether the differences
in visible expenditures can be explained with a signaling model of status
seeking. Among Black households, spending on visible consumption is
found to change predictably with different reference group incomes.