When money is tight, 'purchase happiness' is low
People also write worse customer reviews in times of financial stress


Date:
February 28, 2022
Source:
Duke University
Summary:
Whether they're getting a new shirt, a new computer, or taking a
trip, people derive less 'purchase happiness' from buying things
when they feel financial stress, new research shows.



FULL STORY ========================================================================== Whether they're getting a new shirt, a new computer, or taking a trip,
people derive less "purchase happiness" from buying things when they
feel financial stress, research from Duke University's Fuqua School of
Business shows.


========================================================================== "That feeling of financial constraint leads people to revisit their
purchase and think about what else they could have done with that money,
also known as the opportunity cost," said Fuqua marketing professor Gavan Fitzsimons, who co- authored the findings in the Journal of Consumer
Research. "Because of that question in a consumer's mind about what else
they could have used the money for, every time they think about that
purchase, they are going to be a little less happy with what they did
end up buying." That dissatisfaction also prompted consumers to leave
worse reviews for those purchases -- an insight that can help firms when soliciting customer feedback to encourage more sales.

Financial stress at all income levels The researchers conducted more
than 40 studies measuring people's perceptions about their financial
situations and recent purchases. Whether they bought a material object
or an experience, and whether they paid $100 or $1,000, the results
were consistent: people who felt financial pressure experienced less
"purchase happiness." Feeling financially constrained refers to a
person's perceptions about their financial situation and affects people
of all socioeconomic circumstances, the authors said.

"People at all income levels are feeling financial pressure,
particularly right now," said Fitzsimons, who published the paper with
Fuqua Ph.D. candidate Rodrigo Dias and Eesha Sharma of San Diego State University. "Rents are escalating dramatically, the housing market has
been unreachable for many Americans. Even for people earning well above
the median income in America, they still notice when gas is suddenly
priced at $4 a gallon, and milk costs 50 percent more than it did two
years ago." The impact on customer reviews


========================================================================== Being a cash-strapped consumer impacts more than just a person's "purchase happiness." It could also impact a company's sales, as several studies in
the research demonstrated that financially constrained consumers leave
worse reviews. In one study, the researchers analyzed online reviews
from the website Yelp for the 15 largest restaurant chains across the
U.S., examining data for more than 850 eateries in 15 big cities. Next,
they used U.S. survey data to identify zip codes in which people reported financial stress. They found that people who visited restaurants in zip
codes where residents felt more financial stress also wrote worse reviews,
said Dias, lead author of the research.

In other experiments, the authors tested whether they could induce
feelings of financial constraint by asking people to reflect on the
financial stressors in their life. Indeed, people could be prompted to
feel more constrained, and as a result, those people were less happy
with their purchases and wrote less positive reviews, Dias said.

"Marketers are often encouraging customers to write reviews," Dias
said. "Our research suggests marketers might want to consider if they're
asking people who feel financially constrained to write a review, or
maybe to avoid asking customers to review their purchases during specific
times when they feel financially stressed, such as right before payday." Helping consumers increase their "purchase happiness" Rising costs due to inflation and other factors suggest consumers may face even more financial stress in the coming months. This added financial pressure could compel
more "compensatory consumption," or the act of buying things not solely
for their function or purpose, but because the buyer believes the item
will compensate for a deficit in another area of their life, Dias said.



========================================================================== "People who are financially constrained are more likely to buy things to improve their happiness, but our research shows what happens is precisely
the opposite," he said.

The authors discovered at least one way financially constrained consumers
could get more happiness from their purchases: by planning. "If people
who feel financially constrained make a more conscious decision about
their purchase and plan in advance as opposed to buying an item on the
spot without forethought, they are already thinking through the possible alternatives for how they could have spent that money," Fitzsimons
said. "That helps them get more happiness from their purchase than they otherwise would have. Are they as happy as they would be if they weren't financially constrained? Not quite. But having people plan and think
ahead about how to spend that money can help them derive more happiness
from their purchases." Can money buy happiness? Measuring consumers' "purchase happiness" is just one new way scientists are attempting to
resolve a perennial question about the relationship between wealth and well-being: can money buy happiness? These studies offer some new clues,
Dias said.

"Social scientists have long known that having less money is
associated with lower well-being, at least to some extent," he
said. "Our results suggest that having limited financial resources
hampers well-being not only by restricting what people can buy,
but also by reducing the happiness they get out of their purchases."
special promotion Explore the latest scientific research on sleep and
dreams in this free online course from New Scientist -- Sign_up_now_>>> ========================================================================== Story Source: Materials provided by Duke_University. Note: Content may
be edited for style and length.


========================================================================== Journal Reference:
1. Rodrigo S Dias, Eesha Sharma, Gavan J Fitzsimons. Spending and
Happiness:
The Role of Perceived Financial Constraints. Journal of Consumer
Research, 2021; DOI: 10.1093/jcr/ucab075 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2022/02/220228095500.htm

--- up 10 hours, 50 minutes
* Origin: -=> Castle Rock BBS <=- Now Husky HPT Powered! (1:317/3)