For the first time, researchers provided findings that link materialism, impulsive spending and personal perceptions of economic mobility.
Researchers from the and the University of Wisconsin found that belief in the so-called “American Dream”, or the prospect that upward economic mobility is possible, limits impulse spending among materialistic consumers. Conversely, belief that upward mobility was not possible was associated with higher levels of impulsive spending.
The research findings are published online as a forthcoming paper in the Journal of Marketing Research.
“Our research found a strong connection between materialistic individuals’ belief in the ‘American Dream’ and willingness to spend impulsively,” said Christian Kim, PhD, an associate professor at the Carey Business School. “Essentially, individuals who believed there was not much hope for upward mobility were more inclined to spend now than to save for later. We believe that this research could be used to develop policies or interventions that could help reduce impulse spending of individuals,” said Kim.
In their study, Kim and his co-author, Sunyee Yoon, a PhD candidate at the University of Wisconsin, cite research indicating that 75 percent of American adults generally report making an impulse purchase despite the fact that personal savings rate of the average American is below 5 percent, which is significantly less than what is required for retirement.
For their own study, Kim and Yoon conducted four separate experiments designed to measure perceptions of economic mobility and impulsive spending. In one experiment, participants were provided news articles intended to influence perception of economic mobility either positively or negatively. The participant’s likelihood of impulse spending was measured afterward.
In another experiment, participants were asked questions about an impulse- purchase scenario. In some instances, participants were asked to make a purchase to secure a job interview. In other cases, no reason for the purchase was given. According to the researchers, the experiment found that the interactive effect of perceived mobility and materialism reversed when participants believed the purchase served the goal of achieving financial success.
“There is a dearth of research on how to reduce impulsive spending, especially among materialists,” said Kim. “Our research shows the linkage between materialism and impulsive spending can be moderated by perceptions of economic mobility. We believe these findings could be applied to both public policy and marketing.”
According to the researchers, future studies could examine the effects on perceived economic mobility and conspicuous consumption, in which consumers receive self-value from the positive signals of others.
Source: Johns Hopkins University Carey Business School