How Salary Receipt Affects Consumers' Regulatory Motivations and Product Preferences

Abstract

In this article, we find that consumer preferences change as a function of one's temporal distance from the receipt of the last salary. We propose and test that when consumers have just received their salary (we call this the near-salary condition) they exhibit promotion motivations in their product preference. However, they exhibit prevention motivations in their product preference when a significant time has elapsed since last salary receipt (we call this the far-from-salary condition). We collected data from two longitudinal studies to validate these findings and to test the underlying process. Utilizing actual purchase behavior and collecting product preference over a month we show that consumers' product preferences change in response to temporal distance from last salary receipt. The findings suggest to managers that the best time to promote products or messages with a promotion appeal is the near-salary condition and those with a prevention appeal is the far-from-salary condition.

Keywords: Regulatory focus, Salary receipt, Cyclical preferences, Promotion and Prevention focus, Motivation

JEL Classification: M30, M31, M39, C91, C93, P46, M50