upgrade conditions is 10.5 percentage points for lower-income customers (p-value=0.003), while the same difference for higher-income customers is only 3.1 percentage points (p-value=0.392).<sup>24</sup> We find similar heterogeneity results when we control for caller fixed effects and baseline covariates (Table 1, column (4)) and when we consider Rp 500 million as a threshold to define higher- and lower-income individuals (Table 1, column (5)). This is consistent with the hypothesis that the marginal gain in social image from owning the status good is decreasing in income. In Table A.3, we also provide suggestive evidence that the demand for status is higher in cities and larger metros, consistent with Veblen’s hypothesis that conspicuous consumption will be higher in areas with greater anonymity and income mobility.

# **3.3.2 Alternative Channels and Interpretations**

In this subsection, we consider a number of confounding factors that could explain our results and discuss which of these alternative channels can be ruled out.

We first consider reasons unrelated to status signaling which might make the benefits upgrade treatment unattractive relative to the platinum card offers. First, customers might not have believed that the terms and conditions – such as the credit limits and customer service – in the _benefits upgrade_ condition would in fact be identical to the platinum card, despite the fact that the bank explicitly stated in the offer that they would. Second, customers might have been offended that they were offered the instrumental benefits of the platinum card, but not the actual platinum card.

To test for these concerns, we conducted a follow-up survey with customers in the _benefits upgrade_ condition who had turned down the offer. The interviewer first asked customers an openended question about why they rejected the offer. Next, respondents were prompted with a list of potential reasons, including (1) beliefs about the benefits and services relative to the platinum card, (2) the usefulness of the benefits, (3) the annual fee, and (4) reactions to being offered a benefits upgrade instead of being offered the platinum card itself. Only 1% of the respondents stated that they had doubts that the quality of the benefits and services would be identical to the platinum card. None of the respondents reported being offended by not being offered the platinum card. Among the stated reasons for not accepting the offer, 67% of respondents answered that the annual fee was too high, and 68% said they did not use their existing card enough to justify paying for an upgrade. None of the respondents reported being concerned that the benefits package would come to differ from the platinum card benefits in the future. Taken together, these results suggest that the benefits upgrade offer was found to be believable, and the striking difference in take-up between the instrumental benefits and the platinum card is not explained by customer suspicion, confusion or any offense from not being offered the platinum card.

We next turn to alternative interpretations of the heterogeneity of treatment effects by income. One clear concern is differential selection into the experimental sample itself. Our sample was 24The p-value of a test that the effect of the platinum offer is the same for lower and higher-income groups is 0.284.

13