How Financial Constraints Influence Consumer Behavior: An Integrative Framework

Abstract

Financial constraints are economic limitations on behavior. Given that millions of people experience chronic or episodic financial constraints, we sought to review research that provides insight into how they affect consumer behavior. We propose an integrative framework that draws insights from multiple literatures that have examined financial constraints from different perspectives. The framework distinguishes between four perspectives, which are rooted in literatures on resource scarcity, choice restriction, social comparison, and environmental uncertainty and highlights different temporal stages of responding to financial constraints, distinguishing between reacting, coping, and adapting. Beyond the obvious negative effects of financial constraints, our framework emphasizes consumer resilience, highlighting that consumers often successfully cope with and devise adaptive strategies to deal with financial constraints. By broadening the behavioral and temporal scope of financial constraints considered within consumer psychology, this framework helps us to understand the often strong and sometimes counterintuitive effects of financial constraints on consumer behavior.

Scarcity and Consumer Decision Making: Is Scarcity a Mindset, a Threat, a Reference Point, or a Journey?

“…Work on scarcity as a threat (Hansla and Johansson 2020;Mittal et al 2020) implies these effects may be moderated by childhood resource levels, showing that the effects of present scarcity threats on consumers' self-confidence and sense of luck are moderated by their childhood resource levels. Other potential moderators that merit future examination would be whether consumers believe they can attenuate their scarcity through reasonable effort (i.e., perceptions of situation mutability; Cannon et al 2019) and whether or not scarcity derives from a temporary activation (e.g., a product stockout) versus a chronic condition (e.g., socioeconomic status; Hamilton et al 2019aHamilton et al , 2019b.…”

“…In 2013, Mullainathan and Shafir published their book Scarcity: Why Having Too Little Means So Much, which proposed that scarcity of diverse resources, such as money and time, can have similar cognitive and behavioral consequences. Recent conceptual papers have highlighted the effects of resource scarcity on consumer self-regulation (Cannon, Goldsmith, and Roux 2019), reviewed the effects of financial constraints on consumer decision making (Hamilton et al 2019a), and integrated work on product and resource scarcity to better understand the consumer decision journey (Hamilton et al 2019b). Roundtables on the topic of scarcity convened at the 2018 and 2019 Association for Consumer Research Conferences drew large numbers of attendees, highlighting the opportunity to bring together work on this topic in a special issue of the Journal of the Association for Consumer Research.…”

“…As research on scarcity has evolved, four distinct research perspectives on the effects of scarcity have emerged (Hamilton et al 2019a): resource scarcity, environmental uncertainty, social comparison, and choice restriction. Literature on resource scarcity suggests that scarcity of any resource shifts the consumer's attention (Mullainathan and Shafir 2013) and changes the way they allocate scarce resources (Shah et al 2012); we refer to this perspective as scarcity as a mindset.…”

Efectos de la pandemia de COVID-19 en el comportamiento del consumidor

“…El comportamiento del consumidor en tiempos de crisis se puede conocer desde distintos enfoques teóricos (Valaskova et al, 2015, Amalia et al, 2012, Kirk y Rifkin, 2020, Sheth, 2020a, Hamilton et al, 2019. En el Cuadro 1 se presentan un desglose de los estudios consultados, con su enfoque teórico.…”

“…Una definición conceptual de frugalidad es la ofrecida por Lastovicka et al (1999) como "un rasgo unidimensional del estilo de vida del consumidor que se caracteriza por el grado en que los consumidores están restringidos para adquirir y utilizar ingeniosamente bienes y servicios económicos para lograr objetivos a más largo plazo". (Valaskova et al, 2015, Amalia et al, 2012, Kirk y Rifkin, 2020, Sheth, 2020a, Hamilton et al, 2019.…”