The high cost of low status

June 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: Tackling the high cost of prescription drugs

Related Stories

Tackling the high cost of prescription drugs

December 4, 2017

The high cost of prescription drugs in the United States came under scrutiny in a new report from the National Academies of Sciences, Engineering, and Medicines, "Making Medicines Affordable: A National Imperative," co-authored ...

High-stress childhoods blind adults to potential loss

December 4, 2017

Adults who lived high-stress childhoods have trouble reading the signs that a loss or punishment is looming, leaving themselves in situations that risk avoidable health and financial problems and legal trouble.

Confiscation crusaders try to save Philippine paradise

December 6, 2017

Tata gives hand signals for his men to drop to the rainforest floor as the searing whine of a chainsaw fades, their mission to save a critically endangered piece of paradise in the Philippines suddenly on hold.

Recommended for you

Egypt archaeologists discover mummy in Luxor

December 9, 2017

Egyptian archaeologists have discovered a mummy in one of two previously unexplored tombs across the Nile from the southern city of Luxor, the antiquities ministry said Saturday.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.