The high cost of low status

Jun 26, 2008

Feeling powerless can trigger strong desires to purchase products that convey high status, according to new research in the Journal of Consumer Research.

In a study that may explain why so many Americans who are deeply in debt still spend beyond their means, authors Derek D. Rucker and Adam D. Galinsky (both Kellogg School of Management at Northwestern University) found that research subjects who were asked to recall times when someone else had power over them were willing to pay higher prices for status-symbol items.

"This increased willingness to pay for status-related objects stems from the belief that obtaining such objects will indeed restore a lost sense of power," write the authors.

In three experiments, the authors asked participants to either describe a situation where they had power over another person or one in which someone had power over them. Then the researchers showed them items and asked how much they would be willing to pay.

After recalling situations where they were powerless, participants were willing to pay more for items that signal status, like silk ties and fur coats, but not products like minivans and dryers. They also agreed to pay more for a framed picture of their university if it was portrayed as rare and exclusive.

"As an analogy, consider two individuals, one a successful millionaire and the other a recently demoted banker," write the authors, "Both might view a Rolex watch as a clear status symbol. However for the millionaire, wearing the watch might not make the millionaire feel any more powerful than he/she normally feels. In contrast, for our demoted banker, wearing the same watch might make the banker feel significantly more powerful."

In a society with a plummeting savings rate and skyrocketing debt levels, this research has broad implications. "It suggests that in contemporary America, people use consumer purchases to compensate for psychological states of insecurity," write the authors.

"Spending beyond one's means in obtaining status-related items is a costly coping strategy for dealing with psychological threats such as feeling powerless."

Source: University of Chicago

Explore further: One of world's earliest Christian charms found

add to favorites email to friend print save as pdf

Related Stories

Cutting emissions pays for itself, research shows

Aug 24, 2014

Lower rates of asthma and other health problems are frequently cited as benefits of policies aimed at cutting carbon emissions from sources like power plants and vehicles, because these policies also lead ...

The economy of bitcoins

Aug 07, 2014

The massive spread of the cryptocurrency or digital currency, Bitcoin, opens up new pathways for researchers to study social action on markets. This reveals interesting feedback between the exchange rates ...

Why do some controversies persist despite the evidence?

Aug 04, 2014

The debate over climate change is relatively young while nuclear power and pesticides have been heated topics since the 1960s, and fluoridation since the 1950s. So what is it about these scientific controversies that ma ...

Smarter than a first-grader?

Jul 24, 2014

In Aesop's fable about the crow and the pitcher, a thirsty bird happens upon a vessel of water, but when he tries to drink from it, he finds the water level out of his reach. Not strong enough to knock over ...

Recommended for you

One of world's earliest Christian charms found

19 hours ago

(Phys.org) —A 1,500 year-old papyrus fragment found in The University of Manchester's John Rylands Library has been identified as one the world's earliest surviving Christian charms.

How does your wine make you feel?

Aug 29, 2014

University of Adelaide researchers are investigating the links between wine, where it's consumed and emotion to help the Australian wine industry gain deeper consumer insights into their products.

User comments : 0