That phenomenon, he argued, was driven by the interdependence of people's preferences and the need to maintain or increase one's social status and prestige.
Kenneth Arrow believed that Duesenberry's work offered "one of the most significant contributions of the postwar period to our understanding of economic behavior".
Yet some, such as Robert H. Frank,[4] argue that it outperforms the alternative theories that displaced it in the 1950s, such as Milton Friedman's Permanent income hypothesis.
Frank claims that Duesenberry's theory can explain why the rich tend to save at higher rates than the poor.
Additionally, Duesenberry's recognition of the importance of habit formation aligns the observed short-run rigidity of consumption, as families attempt to maintain their previous standard of living even during recessions.