Positional goods

Positional goods are goods valued only by how they are distributed among the population, not by how many goods there are in total. For example, getting a college degree useful in the job market helps the new graduate, but slightly worsens all others holding that degree, because of increased competition from that graduate. That is, the total benefit from all instances of a positional good is zero-sum, neither increasing nor decreasing.

More formally, positional goods are a subset of economic goods whose consumption (and subsequent utility), also conditioned by Giffen-like pricing, depends negatively on consumption of those same goods by others. In particular, for these goods the value is at least in part (if not exclusively) a function of its ranking in desirability by others, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality.

Although Thorstein Veblen emphasized the importance of one's relative position in society with reference to the concept of conspicuous leisure and consumption, it was Fred Hirsch who coined the concept of the "positional good", in Social Limits to Growth. He explained that the positional economy is composed of "all aspects of goods, services, work positions and other social relationships that are either (1) scarce in some absolute or socially imposed sense or (2) subject to congestion and crowding through more extensive use" (Hirsch, 1977: 27).

Hence, Hirsch distinguished categories of positional goods. Some depend, essentially, on their relative positions (pride of superiority, status and power); others, such as land for leisure activities or land for suburban housing, are positional merely because their total amount is fixed. However, land is valued at least in part for its absolute contribution to productivity, which does not derive from its relative ranking. Thus, some economists (such as Robert H. Frank and Ugo Pagano) only include goods (like status and power) which are valued specifically because of their relative quality.

Hirsch's main contribution is his assertion that positional goods are inextricably linked to social scarcity – social scarcity relates to the relative standings of different individuals and arises not from physical or natural limitations, but from social factors; for instance, the land in Inter-Provincial Montioni Park is physically scarce, while political leadership positions are socially scarce.

...
Wikipedia