Perceived status: meaning and application

A buyer is weighing a standard subscription against a more expensive premium version, and also wonders how colleagues, the manager and finance will view that choice. That estimate is called perceived status. This article explains what the concept means, why people sometimes choose what protects their position and how to research it carefully, because people rarely talk openly about status.

Perceived status is a person's estimate of what a choice, product or role does to their position and standing in the eyes of others.

It is an expectation about others' judgement, not an actual change in status. It can be positive (the choice earns respect) or negative (the choice is seen as a step down). Distinguish formal position, experienced status, status signals and status risk. Status also differs from power: status is the respect and admiration others grant; power is control over resources. The concept is also called status perception.

Neurofactor uses perceived status as a working concept. The term has no single originator or validated instrument of its own. It builds on the classic idea of status display, social psychology of status and hierarchy, and consumer research on status signals.

Its historical origin lies with Veblen (1899). In The Theory of the Leisure Class he introduced conspicuous consumption: visible consumption through which people display wealth. According to Veblen, possessions confer esteem, but merely possessing wealth is not enough to gain others' esteem. His work describes society around 1900; it is not an empirical test.

Magee and Galinsky (2008) draw an important distinction. Status is the extent to which a person is respected or admired by others; power is asymmetric control over valued resources. Status exists in the eyes of others and is conferred by them.

Anderson, Hildreth and Howland (2015) define status as respect, admiration and voluntary deference. Their literature review concludes that the desire for status appears to be a fundamental human motive, partly because people closely track status dynamics and react strongly to potential status loss. This is a synthesis; it does not mean every choice is driven by status.

A related line is subjective social status. The MacArthur ladder by Adler, Epel, Castellazzo and Ickovics (2000) asks people to place themselves on a ladder relative to society and within their own community. Anderson, Kraus, Galinsky and Keltner (2012) found that standing within face-to-face groups was more strongly related to subjective well-being than socioeconomic status.

• Formal position. A person's job, title or rank. It is recorded, but does not in itself show how much respect someone enjoys.
• Experienced status. How a person estimates their own standing, for example within a team or profession.
• Status signals. Visible features from which others infer standing, such as a brand, price level, title or choice of supplier.
• Status risk. The expectation that a choice will cost standing because it looks cheap, risky or unprofessional.

Perceived status connects these components: it is the expectation of how a choice changes experienced status through visible signals. It can differ from what actually happens.

The audience determines the meaning. Because others confer status (Magee & Galinsky, 2008), the first question is always: in whose eyes? A choice that earns respect among peers may raise questions for the budget holder.

Signals are read by those who know the code. Han, Nunes and Drèze (2010) showed that wealthy consumers with a low need for status choose subtle brands mainly their peers recognise, whereas those with a high need for status use prominent logos to stand out. Berger and Ward (2010) found that subtle signals are misread more often, yet people with deep knowledge of a domain still prefer them. The same signal does not mean the same to everyone.

Visibility matters. In experiments by Griskevicius, Tybur and Van den Bergh (2010), students with activated status motives chose sustainable products more often, especially when the choice was public and the sustainable product cost more. These were hypothetical choices, not real purchases.

Loss weighs heavily. In three experiments by Pettit, Yong and Spataro (2010), participants were willing to pay more and exert more effort to prevent a loss of status than to gain status.

Negative perceived status therefore deserves attention. A basic version may look cheap, a tool like a beginner's solution, a role like a sideways move. Whether such an expectation outweighs a possible gain in your situation needs testing: the experiments took place in laboratory groups.

The conclusions are limited. In an fMRI study by Zink et al. (2008), 72 participants played a game in an artificial ranking with simulated co-players. According to a US National Institute of Mental Health press release, the ventral striatum, which is also involved in reward processing, responded to the prospect of rising or falling in rank. This is a single laboratory study whose full text has not yet been consulted here. It cannot reveal the perceived status of an individual customer or employee.

Consumer choices (B2C). Perceived status matters most for products others see, such as clothing, cars or sustainable alternatives. Investigate which audience the consumer has in mind and which signals it recognises. The values and vision of a target group help determine what counts as standing.

Business choices (B2B). These are visible too, to colleagues, managers and budget holders. A choice of supplier can position someone as forward-looking, or as the person who overspent. This is an editorial application of general status research, not a separately demonstrated B2B effect. Here status risk comes close to a target group's greatest fear.

Roles. A new role sometimes changes formal position without experienced status following, or vice versa. Whether a role fits who someone is (identity congruence) or clashes with other roles (role conflict) are related but separate questions.

Perceived status also relates to a choice's direction: towards a desired situation or away from a threat. See desired state and threat state.

1. Define the choice and audience. In whose eyes does status count: colleagues, customers or peers?
2. Map position and experienced status separately. Record the formal position and ask separately about experienced standing in the relevant group.
3. Take stock of the signals. Which features become visible, to whom, and how are they read?
4. Ask about gains and losses. Which choices earn respect and which are seen as a step down?
5. Limit socially desirable answers. Nederhof (1985) describes methods such as anonymous self-administration and forced-choice items, and concludes that a combination of prevention and detection works best. Questions about how others would see a choice and association measures can add to this.
6. Compare contexts and link to the decision. For example, test a visible and a less visible situation; decide in advance which difference matters.

This example is fictitious. A business service provider adds a premium subscription for buyers to its standard subscription, with extra reports and a dedicated contact person.

Decision question. Do buyers see premium as strengthening their position, or as a choice they must defend internally?

Available information. Features and prices are known; budget holders' view of the choice is not.

Suitable approach. Interviews with buyers and budget holders, then an anonymous questionnaire about buyers' own standing and how colleagues would view a buyer with premium. Two descriptions are compared: premium as an exclusive extra and premium as a well-founded choice with demonstrable returns. Outcome measures, such as experienced status risk and request intention, are set in advance.

Possible interpretation. If status risk dominates, a rationale the buyer can use internally may help more than exclusivity. No results are known for this example.

Next step. Check whether the pattern differs between organisations where purchasing is seen as strategic or as operational.

• Equating status with luxury. Standing depends on what a group values, such as expertise or sustainability.
• Looking only at gains. The fear of a step down is often missed.
• Assuming one audience. Colleagues, customers and peers may judge the same choice differently.
• Confusing status and power. Formal authority does not guarantee respect.
• Taking answers at face value. Socially desirable answers are likely (Nederhof, 1985).
• Overrating neuro findings. A single laboratory study says nothing about an individual buyer.

Also consider generalisability. Much behavioural research uses participants from Western, educated, industrialised, rich and democratic societies, who prove unrepresentative in many domains (Henrich, Heine & Norenzayan, 2010). What counts as a status signal also differs between groups and cultures. Group averages do not predict individual behaviour.

Perceived status describes how people estimate what a choice, product or role does to their standing in the eyes of others. It is most useful when you keep formal position, experienced status, status signals and status risk apart and always ask which audience counts. Include both gains and losses, use several methods and treat B2B and role applications as hypotheses to test.