In Delaware, a single digit license plate could cost you more than $1 million:
About more than a rectangular piece of metal, Delaware’s low digit plates signal status.
Low Digit License Plates
Delaware started keeping track of cars by issuing license plates in 1909. But our story begins in 1941 when people could purchase permanent porcelain plates that were numbered from 1 to 87,000. After that, in 1947, they switched to steel for the numbers 87,000 to 200,000.
At first, prominent individuals received the original porcelain plates. Any politician or affluent person with a low number porcelain plate could send a message. It said, “I am rich and/or I am important.” And soon, you just needed to buy a low digit plate to say the same thing.
In a 2020 NBER paper, researchers documented the price of status in Delaware. They calculated that the total value of plates numbered 10 to 99,999 at $227 million. Below, you can see that 3-digit plates are pricier than all with 4 and 5 digits:
Anyone that wants to buy or sell a low digit tag in Delaware, can go to this online marketplace, PC refers to station wagons and SUVs while C is commercial vehicles:
In addition, like the family that spent $675,000 for the number 6 in 2008, you can bid at an auction. (The same Delaware family now has #6, #8 and #9.) As for businesses, so that people can “go out in style,” one burial firm has a low digit plate on its hearse. And, far from Delaware, a #1 Dubai license plate sold for $14.3 million in 2008.
Our Bottom Line: Conspicuous Consumption
Long ago, Thorstein Veblen knew why people could care about a license plate number.
In his Theory of the Leisure Class (1899), Thorstein Veblen (1857-1929) told us that the affluent pursue useless activities like excessive shopping to convey their power and wealth. Servants and employees help the affluent do less while their money lets them signal their status by buying more. A low digit license plate could be precisely what Veblen was talking about.
In a 2010 paper, scholars at USC’s Marshall School of Business used the following diagram to convey some of what Veblen taught us. They could easily have inserted the license plate in the Parvenu slot below:
Thorstein Veblen was rather eccentric. I once read that his let his dirty dishes accumulate until none remained. Then he sprayed them with a hose and started all over again. This is Veblen:
My sources and more: Always intereting and clever, Zachary Crockett over at Freakonomics inspired today’s post. From there, I checked out the low digit marketplace. And then, this academic paper completed the puzzle.
Finally, for more on Thorstein Veblen, my go-to bio site is econlib. And, please note that several sentences from today’s post were in a past econlife.
