Conspicuous corruption: Evidence at a country level

People can exhibit their status by the consumption of particular goods or experiential purchases; this is known as “conspicuous consumption”; the practice is widespread and explains the market characteristics of a whole class of goods, Veblen goods, demand for which increase in tandem with their price. The value of such positional goods lies in their distribution among the population—the rarer they are, the more desirable they become. At the same time, higher income, often associated with higher status, has been studied in its relation to unethical behavior. Here we present research that shows how a particular Veblen good, illicit behavior, and wealth, combine to produce the display of illegality as a status symbol. We gathered evidence at a large, country-level, scale of a particular form of consumption of an illictly acquired good for status purposes. We show that in Greece, a developed middle-income country, where authorities cannot issue custom vanity license plates, people acquire distinguishing plate numbers that act as vanity plate surrogates. We found that such license plates are more common in cars with bigger engines and in luxury brands, and are therefore associated with higher value vehicles. This cannot be explained under the lawful procedures for allocating license plates and must therefore be the result of illegal activities, such as graft. This suggests a pattern of “conspicuous corruption”, where individuals break the law and use their gains as status symbols, knowing that the symbols hint at rule-breaking, as long as the unlawful practice cannot be incontestably established.

market and vanity plates are illegal goods, not "normal" luxury items.Is it the luxury car or the vanity plate that is the Veblen good, or is it both?Is a vanity plate a Veblen good if it does not also appear on a luxury car?Second, a vanity license plate seems like a rather cheap Veblen good, and without more knowledge about how the Greek population perceives vanity plates it is hard to understand the true value of vanity plates in Greek society.We would really need to know more about the pricing of vanity plates to truly understand them as Veblen goods: what is the going rate for such a plate?
Reply: We show that it is highly unlikely that they are obtained legally; however, after their acquisition, they are not illegal.A car owner cannot be arrested for driving a car with a vanity plate, unless there is evidence that it was obtained illicitly.The first question raised under this point is whether a vanity plate by itself would count as a Veblen good; i.e., would it be considered a luxury item if it was displayed on a non-luxury car?Of course a vanity plate will not turn a middle-of-the-road model to a luxury vehicle.However, it might have a small effect: researchers found that in The Netherlands, a new license plate format, with absolutely no intrinsic value, increased a car's price by about 4% [3].We have modified the beginning of the Discussion section accordingly, to allow for more nuance in our definitions.Regarding the second question raised under the point, the going rate is a few hundred of Euros, as we state in the beginning of the Discussion section.We have also made a few additional points on the value of the illicitly acquired vanity plates in the (new) Conclusions section.
Reviewer Point P 2.4 -The last question I ask under P 2.3 points to a real gap in this article, but one which may be too large to actually address in the article (in which case, perhaps the authors could point to this as a research gap, and/or do more work themselves in future work): this is more understanding of the Greek context and what is considered to be luxury in the context.At a very basic level, it would be useful to know how the licensing process works.Could it be, for instance, that there are legal loopholes that allow, for instance, purchasers of new cars to request any license they want, and that is why we see the association between car type and vanity plates?On a related point: while I like the concept of "conspicuous corruption", doesn't this only work if everyone knows that vanity plates are widely understood to be an ill-gotten good?Is it in fact the case that Greek people generally understand vanity plates to be acquired through corrupt means?Also-the authors refer to a Wikipedia list to ascertain what is a luxury vehicle, but isn't such a list dependent on context?For instance, the author argue that a Smart car would be considered a luxury vehicle in Greece, but this would not necessarily be the case in other places where Smart Cars are more common and even looked down upon.Another issue is understanding the value of vanity plates-does the Greek population generally consider vanity plates to be a luxury good?Third, more qualitative evidence about how the black market in vanity plates in Greece works would be useful to bolster the author's claims that they are, in fact, considered luxury goods.On page 6, the authors talk about "rumors" regarding the price of vanity plates, but surely they could also conduct some interviews or find newspaper articles to support this claim?
Reply: We added some explanation of how the racket works in the beginning of the Discussion section.We have no proof that the Greek people in general understand that vanity plates are acquired through corrupt means (although we strongly suspect so).This points at the possibility that the value associated with a vanity plate is not only based on its scarcity, but is also works as a social marker that the owner "knows the ropes", or even is "above the rules".Smart cars are not considered luxury cars in Greece, but they are a status symbol for the design-conscious.We have clarified that, and it certainly is contextdependent.We have added the observation in the Discussion section.Regarding the last point, we added a short description of how the system works, giving a reference to a newsparer article (in Greek) [4] in the beginning of the Discussion section.We also describe briefly how the racket apparently works in the context of the licensing system.
Reviewer Point P 2.5 -Data: what is the timeframe of the data?Details are provided as to when the data was acquired and the number of observations, but not the range of years and geographical locations covered.

Reply:
The dataset covers all registered cars in Greece up to 2017-03-31; we added the clarification in the dataset description.
Reviewer Point P 2.6 -It would be useful to provide some real-world examples of cars when discussing engine size.What kind of luxury car would be found in the larger vs. smaller engine size categories discussed on page 4? How do we know these larger engine sizes are not trucks, i.e. working vehicles?
Reply: The record for each car contains an attribute corresponding to the vehicle type and vehicle use.We have kept only vehicles that are registered as "private" (working vehicles are usually registered as "public" in Greece) and whose type is "passenger vehicle" or "mixed use".We have added the clarification in the dataset description in the text.

Reviewer 3
First, I would like to thank you for the opportunity to review this paper.In general.I believe the authors have investigated a good research topic, entitled, "Conspicuous Corruption: Evidence at a Country Level."The research area lies in my area of interest.I have published articles related to this topic in leading journals.I have enjoyed reading and evaluating this article as it matches my research interests.
This article describes its objective to explore, analyze and evaluate ideas and perceptions of "Conspicuous Corruption".The study describes that general public with wealth can show their status by consuming a particular product or experience Purchase; this is known as "apparent consumption": this practice is widespread and explained the market characteristics of the entire category of goods, Veblen goods, demand increases with its price.Commodities' value lies in their distribution among populations-the rarer they are, the more desirable they become.At the same time, higher incomes tend to be associated with higher status levels, which has been studied in its relationship to unethical behavior.Here, we introduce research Show how status symbols, immoral behavior, and wealth come together displays illegal as a status symbol.We collect evidence at a large national-level the scale of a particular form of consumption of unlawful benefits for status purposes.
The study has focused on a critical issue of society.However, I have some suggestions for the authors to enhance this work quality.I am recommending your research for publication.It is a good topic; however, you need to work on my suggestions to reach scientific merit.Make changes one by one as suggested.
Reviewer Point P 3.1 -Title: Revise the title and cover it with a theme reflecting the central idea of the study.Your title does not display the real sense of the main study.
Reply: We respectfully disagree with the change in title; we believe that the title should reflect the main finding of our study, which indeed is the phenomenon we term "conspicuous corruption" and for which we do gather evidence at a whole country level.
Reviewer Point P 3.2 -Introduction section: The introduction is not strong.Expand your introduction to about 800 words.Discuss research gaps identified from the literature.In my opinion, here two points could very interesting in this study.(1) How can social media play a leading role in educating people about this bad habit?(2) How corporate social responsibility (CSR) can make people sensible to perform their good social duties and contribute to society.
I strongly suggest you build your study with the idea.Your research will become excellent as you have already explored a great idea.The whole world is facing such issues in society; however, it is becoming common in some developing countries.These rich people can spend this wealth for the social good to become immortal.I am suggesting outstanding studies published in leading journals.Please read these studies, improve your introduction, and cite these articles to enhance your work quality.
Regarding the suggested work, our work aims at exposing a phenomenon that predates social media, so the references to media coverage is not relevant.It also predates COVID-19, so that reference is not relevant.Moreover, it has no relation to urban planning, or indeed to any geography-related issues, as the dataset comprises vehicle registration throughout Greece.
Reviewer Point P 3.3 -Literature section: The literature section needs improvement.I suggest the authors to look into the suggested studies to improve literature section.Build your idea how innovative strategies can bring change in the government organizations to change public.The authors add the latest citations to the literature and method sections to enhance the study's quality.Cite these studies in the literature to enhance the quality of your work.Reply: We struggle to see the relevance of the suggested publications with our work.In particular our work is not related to: • COVID-19 and global mental health, • HIV mortality, nor Regarding the suggestion "how innovative strategies can bring change in the government organizations to change public", the goal of our research is not strategy, but the identification and exploration of a particular form of corruption that impacts both the public and the private sector.
Reviewer Point P 3.4 -Methods and results: I suggest adding demographic table by covering education level, age, income level and regions.See the suggested study and explore if religiosity level can motivate people to contribute to the society.You can add graphical presentation of your findings.See these studies to improve your work and cite them in the methods and results sections.
Reviewer Point P 3.5 -Discussion section: Make a separate heading for discussion section, build it on 1000 words, and improve this section.It is short in your study.It should be around one page and a half.Make it strong.See the recommended studies and improve your sections.
we make it clear that we are talking about one particular kind of goods: "We examine whether vehicle owners engage in rule-breaking in order to acquire a particular form of a positional good: a vanity plate for their vehicle." Reviewer Point P 4.2 -Corruption, illegality, and unethicality have been used interchangeably throughout the manuscript.Every term has its meaning which may defer from others in the light of the manuscript hypothesis.In this regard, the manuscript uses some references related to unethical behavior with wealth as a support to his propositions about law-breaking activities.I suggest that authors should review the use for more coherence.
Reply: Following your suggestion, we have gone through the manuscript carefully: • We now use the term "unethical" only relating to results of work in the literature.
• We use the term "corruption" only as in "conspicuous corruption", except from our discussion of corruption in general in the Discussion section (where we start that part of the discussion by "In terms of corruption in general", so the distinction should be clear).
Reviewer Point P 4.3 -The manuscript should have elaborate more in the materials section about the regulations of the acquirement of plate numbers.For instance, the legality of ownership transfer of plates, which is available in many countries worldwide, may affect the whole hypothesis of the manuscript.
Reply: These are good points.License numbers are not transferable.We have added details on the acquisition process in the Materials section and details on how the process can be subverted in the Discussion section.
Reviewer Point P 4.4 -On page 2, the manuscript states that "we examine whether vehicle owners engage in rule-breaking in order to acquire a particular form of a positional good".I did not this examination.Moreover, the manuscript states on page 6 "Conspicuous corruption works because it cannot be proved that the law has been broken".
Reply: It is correct that "engage in rule-breaking" does not reflect accurately what is happening; after all, as we now explain in the Materials and the Discussion sections, license numbers are often acquired by car dealerships, so it is not the owners themselves who carry out the rule-breaking, but the sellers, as a (paid) service to their customers.However, that does not absolve the owners, as they do have to pay for the vanity plate.So it is more accurate to change the sentence to "We examine whether vehicle owners are involved in rule-breaking in order to acquire a particular form of a positional good: a vanity plate for their vehicle."Concerning the proof that the law has been broken, we have rephrased it to "Conspicuous corruption works because it cannot be proved that the law has been broken in a particular instance after the fact; a license plate is by itself legal, even though it may have been illegaly acquired." Reviewer Point P 4.5 -On page 5, the study cites Wikipedia for a piece of information.I do not think this is an authoritative reference.
Reply: Our use of Wikipedia does not involve taking an article as an authoritative reference for a particular subject, but using its category of "Luxury vehicles" to sieve the luxury cars; see https: //en.wikipedia.org/wiki/Wikipedia:Categorization.In order to make sure that the category is not off the mark, we cross-checked with the Euro Car Segments, which are in use in Europe for categorizing vehicles.In particular, we examined the "F: luxury cars" segment, by considering the sales in these segments for 2020, as reported by the Hellenic Association of Motor Vehicle Importers-Representatives. We found that all the F-segment cars sold in Greece in 2020 belonged indeed into the Wikipedia "Luxury vehicles" category, apart from Tesla and Ford Explorer cars.As Ford Explorer is not a brand (it is a brand and a model); therefore we only added Tesla in the examined luxury vehicles.This did not alter the statistical results.
Reviewer Point P 4.6 -On pages 5-6, the authors state that "After some investigation, it appears that the market for vanity plates in Greece is an open secret, the cost for obtaining a desirable number running to a few hundred Euros."These facts should be proved by statistics or citations.
Reply: An internal audit conducted by the competent ministry has uncovered several irregularities that demonstrate the modus oprandi for handing out vanity plates.We have asked for the audit report through a freedom of information request, which was however rejected, due to the report's confidentiality.However, the report has leaked, and we were thus able to add a reference to it from a newspaper article (in Greek, our translation of the most relevant part) in the Discussion section.