Economic behavior over the life span

kristoffersenKirk Kristofferson

Assistant Professor Marketing, W.P. Carey School of Business, Arizona State University

Your research focuses on understanding how social factors in the environment impact our consumption decisions, does that mean that we as consumers act less rational as well think?

The most appropriate answer is “it depends”. In some instances, yes, the social environment can be extremely powerful and can influence consumers to engage in (positive or negative) behaviors they may not otherwise perform if they were alone.

In some of my work, I have looked at how factors in the environment may lead consumers to behave in less helpful, or even dangerous, ways. For example, in the area of charitable giving, we investigated how providing token (e.g., easy, costless) support for a cause (through social media or wearing pins/ribbons) could affect the likelihood of performing actual support that helps the cause (e.g., volunteering, donating). What we found was that when people gave token support that others could see (wearing pins on jackets, signing petitions), they were actually no more likely to follow through and support the cause further than those who provided no token support. Interestingly, when token support was given privately, it was effective at increasing subsequent support.

Other researchers have investigated how the presence and behavior of others in the consumption environment can alter a consumer’s subsequent behavior. For example, research has shown that the mere presense of others can increase purchase of more luxurious brands, potentially due to the motivation to present a positive impression to others. However, other work has shown that observing another consumer physically touching a product can decrease the evaluation for that product. Essentially, other consumers can ‘contaminate’ products in a consumer’s eyes.

Thus, I think it is fair to say that research has shown that the social environment can exert a powerful influence on the decisions consumers make.

Are there any differences between age groups e.g. baby boomer and millennials when it comes to economic behavior?

While economic or purchasing behavior will naturally differ between demographic segments based on wealth and spending power, research has shown that the motivation to achieve different goals does change both between and within age cohorts. For example, older consumers place higher value on the achievement of emotionally meaningful (versus knowledge-related) goals than younger consumers do, which will affect economic decision-making in a variety of domains.

Interestingly, differences also emerge within demographic segments. For instance, within the large baby boomer consumer segment, the wants, needs, and expectations of younger ‘boomers’ vary greatly from older ‘boomers’. Younger boomers are often in better psychological and physical health than older boomers, and may prefer products and services that foster the active lifestyle they desire. Conversely, older boomers may be more interested in products and services that facilitate maintenance of their current abilities. Individual variance will be present, of course, but in general these types of economic differences may emerge within this large segment.

In a time where we digitalize fast which impact has social media on consumption decisions in general?

While social media has woven itself into the daily lives of consumers, the many ways in which it influences consumption decisions is still being uncovered. Interestingly, research has revealed that social media can have both positive and negative downstream consequences. In the marketing domain, for example, research has shown that the demographic characteristics of a brand’s social media supporters has the potential to both to improve and reduce brand evaluations. In the charitable giving domain, the vast reach of social media provides charities with the ability to quickly spread awareness of the important social issues they represent. On the other hand, research has shown that under certain conditions, providing social media support does not necessarily translate into increased donation and volunteer support.

We know that social media usage declines with age does that have an effect on seniors when its come to e-commerce or other online tools?

Research has shown that social media usage, and technology usage in general, does decline with age. However, the senior segment is showing significant changes in this respect, both in terms of social media and online application usage in general. For example, recent survey data suggests that the rate of smart phone usage among seniors has doubled in 2017 compared to 2013 (Pew Research Center 2017). Similar to economic behavior, these behavior changes vary within the large senior segment, with younger and wealthier seniors reporting higher online tools overall.