Captain Samuel Vimes, denizen of Terry Pratchett’s “Discworld”, posited the “Boots” theory of socioeconomic unfairness: the rich were rich because they could afford to buy boots that cost $50 today but lasted a decade, while poor Vimes (with his copper’s coppers) was stuck buying $10 boots that wore through in a year. The seemingly cheaper boots would cost him twice as much in the long run, and leave his feet wet most of the year to boot (if you will). Banerjee and Duflo might phrase it differently, but the general concept of capital constraints preventing long-term optimal spending is familiar to any economist.
In theory, then, buying costlier clothes might be prudent in the long run. After all, the actual value of an item of clothing is the purchase price divided by the number of times you wear it: an expensive jacket that you wear every day is ultimately better value than a sale-rack shirt that you only wear once. However, that logic depends on whether your $50 boots are truly going to last a decade. The savings evaporate if you’re liable to lose them, or if you’ll be embarrassed to wear them once fashions change, or if, heaven forbid, some expensive items of clothing are not actually better quality, but just charging for a logo.
That said, a further consideration is whether by dressing to impress you can, for example, acquire a better job that will get you to a higher salary bracket, far exceeding the cost of your fancy threads. “Costly thy habit as thy purse can buy…For the apparel oft proclaims the man,” advised Polonius, a figure of noted acuity. Many economists have similarly suspected that, in the world of business, a fine wardrobe and bland opinions will get you further than the inverse.
However, this is the kind of tricky signalling question where causality is very hard to establish. Do people do well in business because, to quote the economist J.K. Galbraith, they successfully “articulate the currently fashionable cliché”, or because they’re the kind of person with the social and financial capital necessary to climb the greasy pole and to stay on top of fashion trends (without getting too much grease on their outfit)? If you buy a $1,000 dollar suit, will your bosses be impressed, or mortified that you paired last-season’s shirt with the wrong brand of cufflinks? As Marge Simpson once discovered, a $28,000 suit can get you invited to the country club, but once you get there someone will notice that you always wear the same suit. Almost by definition, the kind of class-based signalling that expensive clothing aims to achieve is hard to get right; if it weren’t, it wouldn’t be an effective signal.
Of course, in some modern workplaces countersignalling is more common than signalling. We’re used to Silicon Valley millionaires and billionaires strolling around in jogging gear. Why is this? Peacocks waste a lot of energy on elaborate tails, thus proving their genetic fitness; the huge tail says, “Look at me, I’m strong and healthy enough that I can get away with this ridiculous tail and not be eaten.” Humans take it one step further, and signal their status by not-signalling: the blatant rebellion against business attire says, “Look at me, I’m rich or smart or well-respected enough that I can show up looking like a lazy teenager and still get listened to at the office.” (This is also a good theory for the origins of the dishevelled-professor look, economist or otherwise.) Like any costly signal, however, it’s hard to pull off unless you’ve earned it reputationally. Interns are not advised to turn up to the office wearing a tracksuit, even if that’s technically living up to the adage: “Don’t dress for the job you have, dress for the job you want.”
Whether your wardrobe is stocked with hoodies or haute couture, if you want to save money on clothing, there’s an obvious solution: buy fewer clothes. If you’re worried that your repertoire will start to look repetitive, combinatorics is your friend. For example, if you have seven different ties, seven different shirts and seven different pairs of trousers, and wear every single possible combination of the three items every day of the working year, you will never repeat an outfit. (If you’re forced to come in at weekends you’ll have to buy another tie.) Whether or not all those ties and shirts and trousers actually go with each other is a different question, but perhaps not one you should be asking an economist.