The phrase 'demonstration effect' was coined by:

Correct option is A

The correct answer is: (a) James Duesenberry

Explanation:
The demonstration effect, a term coined by James Duesenberry in his work "Income, Saving and the Theory of Consumer Behavior" (1949), refers to the phenomenon where the consumption habits and lifestyle of more affluent groups in society influence the consumption choices of less affluent groups. This effect suggests that individuals often compare their consumption with that of others, leading to a desire to emulate the higher standard of living, which may drive increased consumption and potential changes in societal values and behaviors.

Information Booster:

• 
  

  Additional Information:

  James Duesenberry was an American economist who introduced this theory as a part of his work on the relationship between income, consumption, and saving.

  • J.K. Galbraith: Known for his work on the affluent society and the role of mass production in shaping society, but did not coin the term demonstration effect.

  • Joan Robinson: A famous economist who contributed significantly to the field of economics, especially in microeconomic theory, but did not use the term "demonstration effect".

  • J.M. Keynes: A legendary economist whose work primarily focused on macroeconomics and the role of government intervention in the economy, including in his famous General Theory of Employment, Interest, and Money, but was not the creator of the demonstration effect.

  ​

• The demonstration effect emphasizes social influence in consumer behavior, showing that individuals may adjust their spending based on what others, particularly those with higher income, are doing.

• The theory highlights how societal norms and peer pressure can impact personal consumption decisions, especially in a capitalist economy.

• Duesenberry's research also contributed to the development of theory of relative income, where the comparison to others' income becomes a key determinant of an individual’s own consumption habits.

• The demonstration effect is often cited in studies related to income inequality, as it explains how the disparities between groups can influence spending behaviors.

  
  

  Additional Information:

  ​

  • J.K. Galbraith: Known for his work on the affluent society and the role of mass production in shaping society, but did not coin the term demonstration effect.

  • Joan Robinson: A famous economist who contributed significantly to the field of economics, especially in microeconomic theory, but did not use the term "demonstration effect".

  • J.M. Keynes: A legendary economist whose work primarily focused on macroeconomics and the role of government intervention in the economy, including in his famous General Theory of Employment, Interest, and Money, but was not the creator of the demonstration effect.