science

Positional good

Positional good is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Positional good rather than just read about it. In short: Positional goods are goods valued only by how they are distributed among the population, not by how many of them there are available in total (as would be the case with other consumer goods). They have been theoreticized by Fred Hirsch.

Key takeaways

Positional good belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Positional good to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Positional good from memory before moving on to harder problems.

Reference excerpt

Positional goods are goods valued only by how they are distributed among the population, not by how many of them there are available in total (as would be the case with other consumer goods). They have been theoreticized by Fred Hirsch. The source of greater worth of positional goods is their desirability as a status symbol, which usually results in them greatly exceeding the value of comparable goods. Various goods have been described as positional in a given capitalist society, such as gold, real estate, diamonds, and luxury goods. Generally any coveted goods, which may be in abundance, that are considered valuable or desirable in order to display or change one's social status when possessed by relatively few in a given community may be described as positional goods. What could be considered a positional good can vary widely depending on cultural or subcultural norms. More formally in economics, positional goods are a subset of economic goods whose consumption (and subsequent utility), also conditioned by Veblen-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. The term was coined by Austrian-British financial journalist Fred Hirsch, and the concept has been refined by American economics professor Robert H. Frank and Italian economist Ugo Pagano. The term is sometimes extended to include services and non-material possessions that may alter one's social status and that are deemed highly desirable when enjoyed by relatively few in a community, such as college degrees, achievements, awards, etc.

… excerpt ends here. Continue reading the full article.

Worked examples

Example 1 — a first encounter with Positional good

Start with the simplest possible case. Write down what Positional good claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Positional good before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Positional good ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Positional good

In research: Positional good appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Positional good in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Positional good is common in secondary-school and first-year university syllabi. It links to neighbouring topics Goods, Welfare economics, so understanding it makes those chapters shorter.
In everyday life: Look for Positional good outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Positional good in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Positional good means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Positional good out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Positional good in simple terms?

Why does Positional good matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Positional good?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Positional good.