The pauper wears prada? How debt stress promotes luxury consumption

Wangshuai Wang, Tianjiao Ma, Jie Li and Mo Zhang

Journal of Retailing and Consumer Services, 2020, vol. 56, issue C

Abstract: Being in debt prevails in the modern society, but little is known about the behavioral consequences of being under debt stress. Based on compensatory consumption theory, this paper examined how debt stress affects people's consumption behavior. Through a survey and three lab experiments, we found that: (1) debt stress increases consumers' luxury consumption intentions; (2) perceived status demotion mediates this relationship, such that debt stress leads to perceived status demotion, which in turn enhances consumers' luxury consumption intentions; (3) lay rationalism moderates this relationship, such that the positive relationship between debt stress and luxury consumption is stronger among less rational consumers. We concluded by discussing the theoretical and managerial implications of our findings.

Keywords: Debt stress; Luxury consumption; Status demotion; Lay rationalism (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:56:y:2020:i:c:s0969698919311221

DOI: 10.1016/j.jretconser.2020.102144

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