Positional good
Positional goods are products and services impossible to mass produce because their value is mostly, if not exclusively, a function of their desirability in comparison to subsitutes. Positional goods generalize the economic concept of
land. Like land, positional goods often earn
economic rents or
quasi-rents.
Examples of positional goods include high
social status, exclusive
real estate, a spot in the freshman class of a prestigious university, a reservation at the "hottest" new restaurant, and fame. The measure of satisfaction derived from a positional good depends on how much you have in relation to everyone else. A society that devotes more resources to positional goods is wasting effort, since the goal is for some individuals to gain an advantage over other people.
Competitions for positional goods are
zero-sum games because such goods are inherently scarce, at least in the short run. Attempts to acquire them can only benefit one player at the expense of others. Not everyone can be popular, cool, or elite by definition, and in the same sense not everyone can be a star athlete because all those terms imply a separation or superiority over other people.
Real estate is said to represent a positional good because the value of your land primarily depends not upon anything inherent to that land or the buildings which are affixed to it, but the social context in which that land is placed. Some people prefer to live in areas which are less crowded, and other people may want to live in a specific area close to the centers of business. Seeking to acquire space away from other people and trying to acquire land near a center of business is inherently limited because in both cases you are only able to achieve what you want by keeping other people from acquiring it as well.
In general positional goods cannot be created, only redistributed, while material goods can be created with time and effort. Most goods have a positional and a material component, however. Geographical location is a positional component of real estate (in fact, it's often appraised separately from improvements); fast cars may be considered to be inherently scarce because your perception of the car's speed depends on its relation to other vehicles, but there is still an absolute value attached to satisfaction gained from the speed at which the car can travel, so it can be considered as having a positional "status" component and a material component which measures some absolute value.
The term was coined by
Fred Hirsch in
1976 (in: Fred Hirsch, The Social Limits to Growth, Routledge & Kegan Paul, London, 1976). It is used to describe economic goods which are considered to possess a relative or social value rather than an absolute one.
*
Conspicuous consumption*
Georgism
