The oldest theory of distribution, it poses that people spend money on obtaining luxury goods and services to give an indication of their wealth to other members of society.
He highlights society's endless quest for novelty maintaining that 'elegance' or elaborateness of dress, and new styles, which are both indicative of expense, are the main drivers of fashion change.
"[9] In his book Culture and Consumption (1990), Grant McCracken aims to rehabilitate the trickle-down theory by expanding it for modern day application and use in the study of contemporary fashion.
He adapts the theory to include groups that assume superordinate and subordinate roles in the modern trickle-down process but are not necessarily defined in terms of social strata.
When applied to fashion, the theory states that a style is first offered and adopted by the top strata of society and gradually becomes accepted by subordinate groups.
This is because fashion is considered a vehicle of conspicuous consumption and upward mobility within society and allowed people to express their individuality whilst maintaining the security of conformity with other members of their social stratum.
In other words, a single product can be originated from the streets, but the process that turns its adoption into a trend requires some form of elite to leverage the masses, hence it is nothing but a trickle-down in disguise.
[12] Whilst the theory has received attention due to its pioneering nature, conceptual development and its use in subsequent and related explanations of fashion diffusion and change, it faces many criticisms.
In a revision of the theory, McCracken states that Simmel does not explain the trickle down effect in its full detail and complexity, failing to account for the fact that only the lowest and highest-ranking groups in society have a single motive for their consumer behaviour.
[1] He also holds that whilst the theory may have been an accurate representation of fashion at the turn of the 19th century, when Simmel and Veblen were writing, the Simmel–Veblen model has little place in today's society.
Trying to assign order to a complex phenomenon that usually consists of a range of factors including imitation and differentiation, adoptions and rejects all in relation to an individual's social surroundings[17] has restricted the theory.