The Impact of Economic Perceptions on Status Consumption: An Exploratory Study of the Moderating Role of Education

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Journal of Consumer Marketing




Purpose- Given the economic downturn, the purpose of this study was to determine if a relationship exists between economic perceptions and consumers' motivation to consume for status and if this relationship was moderated by education level.

Design/methodology/approach– A stratified random sample of adult consumers in the southeastern USA were surveyed by telephone. The hypotheses were tested utilizing structural equation modeling.

Findings– The results indicated that those consumers with a lower level of perceived economic welfare (i.e. see the economy and their family's financial situation as worse this year versus last year) were less motivated to consume for status. Furthermore, this relationship was positively moderated by education. No relationship was found between consumer confidence (i.e. consumers' perceptions of the economy in the future year) and status consumption. The results suggest that those consumers who perceive themselves to be financially better off this year versus last, particularly those more educated, are more motivated to consume for status.

Research limitations/implications– The main research limitation was that the sample skewed to be older, female and Caucasian, though the sample did match Census figures for the critical variable of education. Additionally, the phone response rate was 9 percent, but it is important to recognize that this was for a non-student sample.

Practical implications– The results suggest that marketers, targeting luxury consumers in the current stagnant economy, aim for more educated consumers who see their economic welfare as improving. This implication stems from the research findings revealing that consumers who feel they are recovering economically from the recent economic downturn, especially those with higher education levels, may more likely be status consumers.

Originality/value- With the democratization of luxury there is renewed interest in luxury consumption research. While research suggests there is a relationship between economic conditions and status consumption, few studies have measured consumer economic perceptions in relation to status consumption and none have examined how education may play a moderating role in explaining why people buy luxuries in a tough economic climate.