What Is the Trickle-Down Effect?

The trickle-down effect, in marketing, refers to the phenomenon of fashion trends flowing from upper class to lower class in society. Similarly, it may also refer to how new consumer products, when first introduced into the market, are costly and only affordable by the wealthy, but as the product matures its price begins to fall so it may be more widely adopted by the general public.


Key Takeaways

  • The trickle-down effect is a term used in marketing and advertising. 
  • It can refer to the notion that fashion trends “trickle-down” from upper-class citizens to lower-class citizens, or that as a product becomes well-adopted, the price falls.
  • The trickle-down effect isn’t to be confused with trickle-down theory, where the latter refers to trickle-down economics and the passing down of tax breaks from the wealthy to the less-wealthy. 

How the Trickle-Down Effect Works



The trickle-down effect commonly employs social media, and an advertisement that goes viral through these channels can gain mass media coverage as a news story, giving the ad wide distribution without the costs traditionally associated with advertising through mainstream channels.

Trickle-Down Effect History


The trickle-down effect is incorporated into the theory of conspicuous consumption by Thorstein Veblen in "The Theory of the Leisure Class," which says that individuals buy luxury goods and services to display their wealth to others. In a more modern context, the trickle-down effect is applied not to classes but to age, ethnicity or gender by Grand McCracken in "Culture and Consumption."

Trickle-Down Effect vs. Trickle-Down Theory

The trickle-down effect is only tangentially related to the trickle-down theory of economics, which posits that rewarding the wealthy or businesses with tax cuts will stimulate the economy and will benefit society.