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Seeking Lasting Enjoyment with Limited Money: Financial Constraints Increase Preference for Material Goods over Experiences

17 Pages Posted: 18 Aug 2013 Last revised: 21 Oct 2015

Stephanie M. Tully

University of Southern California - Marketing Department

Hal E. Hershfield

University of California, Los Angeles (UCLA) - Marketing Area

Tom Meyvis

New York University (NYU) - Department of Marketing

Date Written: 2015

Abstract

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.

Keywords: financial decision making, material purchases, experiential purchases, financial constraints, long-term focus

JEL Classification: D12, D31, D91, M31

Suggested Citation

Tully, Stephanie M. and Hershfield, Hal E. and Meyvis, Tom, Seeking Lasting Enjoyment with Limited Money: Financial Constraints Increase Preference for Material Goods over Experiences (2015). Journal of Consumer Research, Vol. 42, 2015. Available at SSRN: https://ssrn.com/abstract=2311322 or http://dx.doi.org/10.2139/ssrn.2311322

Stephanie M. Tully (Contact Author)

University of Southern California - Marketing Department ( email )

Hoffman Hall 701
Los Angeles, CA 90089-1427
United States

Hal E. Hershfield

University of California, Los Angeles (UCLA) - Marketing Area ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Tom Meyvis

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

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