Seeking Lasting Enjoyment with Limited Money: Financial Constraints Increase Preference for Material Goods over Experiences
Stephanie M. Tully
University of Southern California, Marshall School of Business, Students
Hal E. Hershfield
University of California, Los Angeles (UCLA) - Marketing Area
New York University (NYU) - Department of Marketing
Journal of Consumer Research, Vol. 42, 2015
Consumers with limited discretionary money face important trade-offs when deciding how to spend it. In the current research, we suggest that feelings of financial constraint increase consumers’ concern about the lasting utility of their purchases, which in turn increases their preference for material goods over experiences. The results of seven studies confirm that the consideration of financial constraints shifts consumers’ preferences toward material goods (rather than experiences), and that this systematic shift is due to an increased concern about the longevity of the purchase. This preference shift persists even when the material goods are more frivolous than the experiences, indicating that the effect is not driven by an increased desire for sensible and justifiable purchases. However, the shift toward material purchases disappears when the material good is unusually short lived, further implicating concern about longevity as the key driver of the effect. Finally, the consideration of financial constraints increases preference for material purchases even when the potential memories that experiences can provide are made explicitly salient. Together, these results indicate that financially constrained consumers spend their discretionary money on material purchases as a means of securing long-term consumption utility.
Number of Pages in PDF File: 17
Keywords: financial decision making, material purchases, experiential purchases, financial constraints, long-term focus
JEL Classification: D12, D31, D91, M31
Date posted: August 18, 2013 ; Last revised: October 21, 2015
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