A positional good is an intrinsically scarce good whose value is determined by its social context, as opposed to a material good which has innate value. A positional good is something which is inherently finite and can not be increased by devoting more economic resources to it because its value is dependent on how much is owned relative to what other people own. More people acquiring a positional good diminishes its value.

Examples of positional goods include social status, quality real estate, and athletic ability. 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. In sociology, social status is the standing, the honour or prestige attaching to ones position in society. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...

Positional goods are characterized as representing zero-sum games because they are inherently scarce, only possessing relative value. Attempts to acquire them can only benefit one player at the expense of others. Everyone can not be popular, cool, or elite by definition, and in the same sense everyone can not 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, 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. Zero-sum describes a situation in which a participants gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...

In general positional goods can not be created, only redistributed, while material goods can be created with time and effort. Most goods have a positional and a material component, however. 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. It is used to describe economic goods which are considered to possess a relative or social value rather than an absolute one. 1976 is a leap year starting on Thursday (link will take you to calendar). ...

See also

• conspicuous consumption