In her Economic Scene column at the New York Times, Virginia Postel presents a fascinating issue about consumer behavior which I think about, but haven’t correctly incorporated into my frame of consumer behavior. When we present an attractive offer to our target audience, do we really stop and think hard about how accepting it will affect their self-image and social status? I think we usually forget.

Virginia Postrel: Adding Social Norms to the Usual Methodology Mix – New York Times.

In a series of articles published over the last few years, Professor Akerlof of the University of California, Berkeley, and a fellow economist, Rachel E. Kranton of the University of Maryland, have developed economic models that incorporate identity.

"Because identity is fundamental to behavior, choice of identity may be the most important ‘economic’ decision people make," they write in "Economics and Identity," published in the August 2000 Quarterly Journal of Economics, adding, "Limits on this choice may also be the most important determinant of an individual’s economic well-being."

If taking an Advanced Placement class means being labeled a nerd, for example, a bright high school student may take an easier class, even though the A.P. track promises higher income down the road. Those identity trade-offs may be more extreme for working-class or minority students whose families, neighbors or peers may regard them as traitors to their heritage.