What the hedonic treadmill does to your finances

livemint.com:

₹50,000 per month, using smartphones worth more than ₹1 lakh. As an October 2023 article in the Mint reported: “In 2023, one-third of smartphone sales in India is projected to be financed, seeing a notable increase from 25% in 2022 and 18% in 2021." In fact, higher the price of the phone, more the chance that it has been bought on a loan: “Half of the sales of the premium segment (above ₹30,000) is expected to be from easy finance options." The fact that loans are easily available is one factor driving people to take them on. Even assuming that these loans are genuine zero interest loans, why do people still buy expensive phones on loans? Smartphones are ultimately depreciating assets.

A new and a supposedly better model will hit the market soon. So, why not buy a cheaper model instead with almost similar usage functions and invest the difference somewhere? But then if people bought products just for their utilitarian value, some companies would never make the kind of money they make. Yanis Varoufakis explains this in Technofeudalism—What Killed Capitalism, using the example of Don Draper, a character from the TV series Mad Men.

Draper, as those who have watched this series set in the 1960s, would know, works as a creative director in an advertising agency. In one episode, Draper explains to his colleague Peggy: “You are the product. You, feeling something," while trying to explain to her how to think of Hershey, a chocolate bar that their advertising firm was trying to sell.