The impact of economic perceptions on status

consumption: an exploratory study of the

moderating role of education
Dora Elizabeth Bock and Jacqueline Kilsheimer Eastman
Department of Marketing and Logistics, Georgia Southern University, Statesboro, Georgia, USA, and

Benjamin McKay
Department Business Research and Economic Development, Georgia Southern University, Statesboro, Georgia, USA
Abstract
Purpose Given the economic downturn, the purpose of this study was to determine if a relationship exists between economic perceptions and
consumers motivation to consume for status and if this relationship was moderated by education level.
Design/methodology/approach A stratified random sample of adult consumers in the southeastern USA were surveyed by telephone. The
hypotheses were tested utilizing structural equation modeling.
Findings The results indicated that those consumers with a lower level of perceived economic welfare (i.e. see the economy and their familys
financial situation as worse this year versus last year) were less motivated to consume for status. Furthermore, this relationship was positively
moderated by education. No relationship was found between consumer confidence (i.e. consumers perceptions of the economy in the future year) and
status consumption. The results suggest that those consumers who perceive themselves to be financially better off this year versus last, particularly
those more educated, are more motivated to consume for status.
Research limitations/implications The main research limitation was that the sample skewed to be older, female and Caucasian, though the
sample did match Census figures for the critical variable of education. Additionally, the phone response rate was 9 percent, but it is important to
recognize that this was for a non-student sample.
Practical implications The results suggest that marketers, targeting luxury consumers in the current stagnant economy, aim for more educated
consumers who see their economic welfare as improving. This implication stems from the research findings revealing that consumers who feel they are
recovering economically from the recent economic downturn, especially those with higher education levels, may more likely be status consumers.
Originality/value With the democratization of luxury there is renewed interest in luxury consumption research. While research suggests there is a
relationship between economic conditions and status consumption, few studies have measured consumer economic perceptions in relation to status
consumption and none have examined how education may play a moderating role in explaining why people buy luxuries in a tough economic climate.
Keywords Consumer confidence, Consumer welfare, Economic perceptions, Status consumption
Paper type Research paper

throughout the world (financial, functional, personal, and

social dimensions of luxury value perceptions) and that this
global demand for luxury products is part of the global
consumer culture. Consumers of luxury products come from
all different social and income classes and use prestige
products because of the enjoyment they feel when wearing
well-known status brands and because these brands make
them feel confident (Husic and Cicic, 2009).
This interest in status goes beyond income to represent
value preferences rather than earning levels (Dubois and
Duquesne, 1993) as even consumers with low incomes will
buy luxury brands (Mason, 1992; Bagwell and Bernheim,
1996; Phau and Cheong, 2009; Hudders, 2012). Truong et al.
(2008) and Gardyn (2002) noted that luxury goods have
become more affordable and accessible to new customers (a
phenomenon known as the democratization of luxury).
Examples of these affordable luxuries include old-luxury
brand extensions that are lower-priced versions of luxury
products, such as BMW 325 sedans and Tiffany sterling silver
key chains, as well as new luxury brands, such as Belvedere
vodka (Gardyn, 2002; Silverstein and Fiske, 2003).
Therefore, more consumers are willing and able to pay a
price premium for higher quality, higher status products. This

An executive summary for managers and executive

readers can be found at the end of this issue.
Prior to the recent economic downturn, research suggested
that the luxury market was thriving (Han et al., 2010; Husic
and Cicic, 2009; Truong et al., 2008). Husic and Cicic (2009)
found that luxury consumers behave similarly throughout the
world, regardless of economic or social surroundings, such
that these consumers use the same brands and wish to fulfill
the same needs with luxury products. This is similar to
Eastman et al. (1997) who reported levels of status
consumption, conceptualized as the motivation to consume
for status, are comparable in the US, China, and Mexico.
Likewise, Eng and Bogaert (2010) determined that the
motivational drivers to buy luxury products are the same
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0736-3761.htm

Journal of Consumer Marketing

31/2 (2014) 111 117
q Emerald Group Publishing Limited [ISSN 0736-3761]
[DOI 10.1108/JCM-10-2013-0725]

111

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

new boom in the luxury market has renewed interest in luxury

consumption research (Truong et al., 2008).
Eng and Bogaert (2010) state a direct relationship between
economic growth and increased spending on luxuries exists
because as economic conditions improve, there is an increase in
disposal income for luxury products. Given the current state of
the economy, this suggests that status consumption may have
changed since the start of the recession in December 2007
(Interbrand, 2008; Lahart and Dodes, 2010). Samuelson
(2010) notes that the most recent recession has impacted every
social class with job losses, pay cuts, and lowered home,
retirement, and portfolio values and has changed America
psychologically, economically, and socially for years to come.
As a result, insecurity and uncertainty have gone upscale as
people plan for the worst, are reluctant to make major
purchases, and potentially retard the recovery with their
pessimism (Lahart and Dodes, 2010; Samuelson, 2010). Carty
(2009) suggests that even ultra-wealthy consumers are
tightening their belts when it comes to luxury products.
The purpose of this paper is to examine how consumer
motivation to consume for status (i.e. status consumption)
relates to consumers current perceptions of economic welfare
as well as their confidence in the future economy. As consumer
attitudes have been found to be significant predictors of future
behaviors (Kraus, 1995) and consumer attitudes have been
able to predict future consumption growth (Ludvigson, 2004),
it is important for managers to understand consumers
attitudes towards consuming for status. Given the impact of
the current economy on firms, it is becoming even more critical
for managers to understand their consumers motivations and
to be able to identify differences in consumption behavior in
terms of purchases across luxury product categories and in
different retail settings (such as online versus offline) (Egol
et al., 2010). With the uncertainty of the stock market and
terrorist threats, understanding what consumers are looking
for from luxury products and services is increasingly important
today (Gardyn, 2002, p. 33). This paper contributes to the
literature by relating consumers level of status consumption to
their self-reported perceptions of the current and future
economy. This is a vital topic for consumer research to
consider as consumers economic perceptions may have a
significant impact on their motivations to consume, particularly
in terms of status products. This article begins by providing a
literature review and the hypotheses. Then the research
methodology and results are presented. Finally, based upon
this research, suggestions for luxury marketers are offered.

confidence as consumers perceptions of future business

conditions, job availability, and income (Bechtel, 2008), while
we operationalize perceived economic welfare as consumers
perceptions of their current financial standing as well as
current country and state conditions.
In looking at how economic perceptions impact status
consumption, Eastman and Eastman (2011) suggest that the
majority of consumers do not feel comfortable buying status
products and, if they are looking for status, they will consider
inexpensive products and discount store merchandise to meet
their need for status consumption. Eastman and Eastman
(2011) also suggest that the less status-conscious a consumer
is, the more frivolous he would consider the purchase of status
products during an economic downturn.
Status consumption
Status consumption is the motivational process by which
individuals strive to improve their social standing through the
conspicuous consumption of consumer products that confer
and symbolize status both for the individual and surrounding
significant others (Kilsheimer, 1993, p. 341; Eastman et al.,
1999, p. 41). It is an individual difference variable that
addresses a persons motivation to consume for status. This
consumption-related need for status is the tendency to
purchase goods and services for the status or social prestige
value that they confer on their owners (Eastman et al., 1999,
p. 41) regardless of income or social class level.
Status is derived from the evidence of wealth provided by
conspicuous consumption and the power that results from the
associated respect, consideration and envy of others (Veblen,
1899; Eastman et al., 1999). Packard (1959, p. 5) defines
status seekers as people who are continually straining to
surround themselves with visible evidence of the superior rank
they are claiming. Thus, status consumption fulfills hedonic
needs (Eng and Bogaert, 2010), and the conspicuous
consumption of luxury goods provides the consumer with
satisfaction from others reactions to the wealth displayed
rather than from the value of the product itself (Mason, 2001).
Husic and Cicic (2009, p. 234) assert that by using status
goods as symbols, individuals communicate meaning about
themselves to their reference groups. This desire for status
involves consumption of items that represent status both to
the individual and to surrounding significant others (Eastman
et al., 1999). Attitudes about luxury consumption are linked
to the display of wealth and the symbolic meanings from ones
social position and identity (Eng and Bogaert, 2010);
however, the literature also suggests that ultra-rich or oldmoney consumers prefer status goods that are not flashy and
are noticeable only to others in their group, such as with the
use of smaller logos (Husic and Cicic, 2009; Han et al., 2010).
In considering how status consumption has been impacted
by the economy, Interbrand (2008) found that 95 percent of
consumers sampled would change their overall spending
based upon a decline in the current economy, and luxury
items would be where they would cut their spending the most.
Consumers may be bashful about buying luxury products
given the current economy (Eastman and Eastman, 2011),
demonstrating the idea of the shame of luxury (Design
Week, 2009, p. 14). Egol et al. (2010) offer that recessiondriven behaviors, such as increased savings, deferred
consumption and weakened brand loyalty, are unlikely to
change even as the economy improves due to the long
duration of the current economic downturn that has
entrenched consumers frugality patterns. Others suggest
that access to luxury is no longer a dichotomous state between

Literature review
In this literature review, the concepts of consumer confidence,
economic welfare, and status consumption are briefly
discussed. Then a review of status consumption research is
presented with the four hypotheses to be tested.
Consumer confidence and economic welfare
Consumer confidence indicators attempt to gauge consumer
attitudes toward various socioeconomic issues (Katona,
1975). Currently, two indices, The Conference Boards
Consumer Expectation Index and The University of
Michigans Index of Consumer Expectations, are widely
used as consumer confidence indicators (Ludvigson, 2004);
however, a recent study by Bechtel (2008) suggests that a
measure that combines elements of both indices, a dualsource indicator of consumer confidence, offers richer
information. In this article, we operationalize consumer
112

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

the affluent and the excluded, but that the excursionists

(those ordinary consumers who buy and consume luxury
products from time to time or in specific circumstances and
for who buying and consuming luxury products is not part of
their daily life style) play a major role in the luxury market
(Dubois and Laurent, 1994, 1995, 1996).
Given the aforementioned literature review, the following
hypotheses (see Figure 1) dealing with status consumption
and perceptions of the economy are offered:

H3a. The relationship between perceived economic welfare

and status consumption will be moderated by ones
level of education.
H3b. The relationship between consumer confidence and
status consumption will be moderated by ones level of
education.

H1.
H2.

Methodology
In the methodology section, the data collection process and
sample are described. This is followed by a description of the
measures used to examine the constructs.

Those with a lower level of perceived economic welfare

will be less motivated to consume for status.
Those with a lower level of consumer confidence will
be less motivated to consume for status.

Data collection
The population for this analysis included consumers residing
throughout the state of Georgia. The sampling technique
employed included a stratified random sample based upon the
population in the region to ensure adequate representation
among the different counties surveyed. Participant contact
information was purchased from InfoUSA and the data were
gathered using telephone surveys. Therefore, households were
used as the sampling unit. The survey was conducted in late
October of 2012 over a five-night timeframe, prior to the US
presidential election. Overall, 295 surveys were completed
with a response rate of approximately 9 percent. The margin
of error for this survey was 5.7 percent.
While this response rate may be considered low, it is
important to consider that the sample was a non-student
sample, which per Kraus (1995) offers a more accurate link
between attitudes and behaviors. To assist in data collection,
students enrolled in a senior-level marketing class were
trained on how to conduct telephone surveys and served as
interviewers for the current research. The interviewers used
Google voice to administer the phone calls. The participants
were first asked items related to perceived economic welfare,
followed by consumer confidence and status consumption;
the survey concluded by gathering demographic information,
including gender, age, ethnicity, marital status and
educational attainment.

Prior work signals that the relationship among perceived

economic welfare and consumer confidence on status
consumption may be impacted by education. Particularly
Xuemin and Youning (2007, p. 269) suggest that consumers
with a higher level of education (bachelor degree or higher)
evaluate product attributes differently than consumers with
lower levels of education. Specifically, the authors state,
higher education groups attach importance to the reputation
of goods or services, quality, and personality-oriented
consumption. While Xuemin and Youning (2007)
examined relationships between educational attainment and
consumption with a Chinese sample, given that similarities in
status consumption exist across cultures (Eng and Bogaert,
2010), we anticipate that education will impact the link
between economic perceptions and status consumption. We
propose that education level encapsulates peoples
perceptions of their current and future earning capacity
beyond what a current income level measure could
accomplish given the current economic climate.
Additionally, Julian and Kominski (2011) report that as
consumers increase their level of education, their amount of
income will also increase over their working life. While it is
possible for less educated consumers in trade fields to make a
higher salary than highly educated consumers, we felt that
education better captured consumers perceptions of earning
potential. Moreover, given the current economic conditions,
the researchers believed that asking income related questions
over the phone could be intrusive for some participants and
that participants maybe more willing to honestly provide their
level of education compared to income level in a telephone
survey setting. Thus, we propose the following:

Sample
Participant demographics were compared to the demographics
for the state of Georgia (Census Bureau of the United States,
2010). Generally, the data were skewed toward female (59
percent), white (79.5 percent), older (median age category 4655 years old), and married individuals 61.1 percent).
Importantly, the samples educational attainment was similar
to the educational attainment for the state of Georgia
according to the Census Bureaus (2010) findings.
Specifically, 28.3 percent of the sample obtained a college
degree, whereas 27.5 percent of Georgia residents obtained a
college degree, according to the Census Bureau (2010). As
education was the critical demographic construct under
consideration in this study, it is important that the sample
matched the population in this regard. A demographic
summary of participants is included in Table I.

Figure 1 Conceptual framework

Measures
For the purpose of this study, three constructs were
examined: status consumption with the scale developed by
Eastman et al. (1999), consumer confidence based upon
Bechtel (2008), and perceived economic welfare with items
adapted from Gallup (2012) and Ludvigson (2004). Principal
components analysis with varimax rotation was conducted to
113

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

the respondents consistently felt their economic welfare was

slightly worse than last year. Finally, to measure consumer
confidence, the three-item economic confidence measure
(Bechtel, 2008) was adapted to look more specifically at the
state of Georgia. The three survey questions (measured with
three-point scales ranging from one meaning worse, two
meaning the same, and three meaning better) addressed
expected changes in the next six months in terms of general
business conditions, available jobs in ones area, and total
family income. The mean score for the three survey items
ranged from 2.21 to 2.39, indicating that the respondents
consumer confidence was slightly more positive for the
upcoming year. Thus, for the consumer confidence items as a
whole, people expect that the economic conditions will be
slightly more positive during the next year.

Table I Sample demographics

%

Gender
Male
Female

41
59

Ethnicity
White
African American
Some other race
Other

79.5
13.8
2.1
4.6

Marital status
Married
Single (never married)
Widowed
Divorced
Separated
Unmarried
Not specified

61.1
15.2
10.2
9.2
1.8
1.8
0.7

Age
18-25
26-35
36-45
46-55
56-65
Over 65
Not specified

7.8
5.3
11.0
26.9
20.8
27.9
0.3

Education
High school or less
High school graduate
Some college
2-year associate degree
4-year college degree
Some graduate school
Graduate degree
Not specified

4.6
16.6
17.7
9.9
28.3
3.9
18.7
0.3

Results
Next, a two-step modeling process was performed to examine
the hypotheses (Anderson and Gerbing, 1988; Hair et al.,
2009). First, a measurement model was created that
correlated consumer confidence, perceived economic
welfare, and status consumption. Although the x2 value is
the only statistical measure of model fit, its computation is
affected by model complexity and sample size; thus
researchers advocate examining alternative measures such as
the comparative fit index (CFI) with recommended values
above 0.90 (Netemeyer et al., 2003) or 0.95 (Hu and Bentler,
1999), and the root mean square error of approximation
(RMSEA) with recommended values below 0.08 (Browne
and Cudeck, 1993). Following these guidelines, the results
indicated acceptable model fit (x2 92.71 (41), p , 0.001,
CFI 0.95, and RMSEA 0.065). In support of convergent
validity, all items significantly loaded to their corresponding
factors although item loadings were not as high as indicated
through exploratory factor analysis. In further support of
convergent validity, estimates of average variance extracted
were computed. Consumer confidence and status
consumption surpassed the recommended criteria of 0.50,
in which average variance extracted equated to 0.50 and 0.59,
respectively. The average variance extracted for economic
welfare was 0.46, which fell slightly below the recommended
guideline. Discriminant validity was assessed by comparing
average variance extracted to squared construct correlations
(Fornell and Larcker, 1981). These comparisons indicated no
potential threat to discriminant validity. Lastly, nomological
validity was assessed by examining the significance and
direction of construct correlations. The results indicated that
perceived economic welfare and consumer confidence were
positively and significantly related (0.62, p , 0.05), that
perceived economic welfare and status were positively and
significantly related (0.17, p , 0.05); however, consumer
confidence and status shared no significant relationships
(0.04, p . 0.05). Next, a structural model was estimated,
and, given the equivalent degrees of freedom and paths
between the measurement and structural models, identical
model fit results were obtained.
Following the assessment of model fit, structural paths were
examined to determine support for the hypotheses. In support
of H1, perceived economic welfare had a positive and direct
effect on status consumption (standardized path
estimate 0.22, p , 0.05); however, the results revealed
that consumer confidence had no effect on status
consumption (standardized path estimate 20.06, p . 0.05);
therefore, no support was found for H2. Then, to assess the

examine the psychometric properties of the items. The results

indicated that each set of items significantly loaded to their
corresponding factor. Additionally, total variance explained
for each set of items was greater than 0.58 and Cronbachs
alpha estimates surpassed 0.74 (perceived economic
welfare 0.76,
consumer
confidence 0.74,
and
status 0.84), thus satisfying recommended criteria (Hair
et al., 2009) as shown in Table II.
To measure status consumption, four of Eastmans et al.
(1999) status consumption scale items were utilized,
measured on a seven-point Likert scale (from 1 strongly
disagree to 7 strongly agree). The range of the status
consumption items was from 1.97 to 2.96, indicating the
sample, as a whole, was not motivated to consume for status.
To measure perceived economic welfare, four items were
adapted (Gallup, 2012; Ludvigson, 2004) to measure
consumers current perceptions of the economy (both US
and Georgia) compared to last year. A three-point scale was
utilized ranging from 1 (worse off currently than last year/not
kept up with the cost of living) to 3 (better off currently than
last year/kept up with the cost of living). The average of these
four survey items ranged from 1.77 to 1.88, indicating that
114

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

Table II Item properties

Construct
Economic welfare

Consumer confidence

Status consumption

Cronbachs
alpha
0.76

0.74

0.84

Item
Do you think the US economy is (1) worse,
(2) about the same, or (3) better than it was at
this time last year?
Compared to last year are you and your family
living with you (1) worse off, (2) about the
same, or (3) better off financially?
During the past year, has your familys salary
(1) not kept up, (2) somewhat kept up, or
(3) has kept up with the cost of living?
Do you think the Georgia economy is (1)
worse, (2) about the same, or (3) better than it
was at this time last year?
Looking ahead one year from now, do you
think general business conditions in Georgia
will be (1) worse, (2) the same, or (3) better?
Looking ahead one year from now, do you
think there will be (1) fewer, (2) about the
same, or (3) more jobs available in Georgia?
Looking ahead one year, do you think your
total family income (all wage earners living
with you) will be (1) lower, (2) about the same,
or (3) higher than it is now?
I am interested in new products with status
I would buy a product just because it has
status
I would pay more for a product if it has status
A product is more appealing to me if it has
some snob appeal

moderation predicted in H3, a multi-group analysis was

conducted that used education as the grouping variable.
Specifically, participants attaining less than a four-year college
degree were considered the less educated group, while those
attaining a four-year college degree or more were considered
the more educated group. Results indicated good model fit
(82),
p , 0.001,
CFI 0.94,
and
( x2 141.92
RMSEA 0.05). Interestingly, analyzing the results for the
less educated group revealed that both perceived economic
welfare (standardized path estimate 0.07, p . 0.05) and
consumer confidence (standardized path estimate 0.07,
p . 0.05) had no effect on status; however, the results for the
more educated group revealed that perceived economic
welfare had a positive direct effect on status (standardized
path estimate 0.39, p , 0.05), but no significant
relationship was shared between consumer confidence and
status (standardized path estimate 2 0.19, p . 0.05). By
demonstrating that the path between perceived economic
welfare and status consumption differs by education, the
findings offer evidence in support of H3a, but fail to offer
support for H3b.
In summary, the results reveal that perceived economic
welfare does have an impact on consumption for status
products, while consumer confidence does not. Thus,
perceptions related to ones current standing, rather than
perceptions of future well-being impact the desire for status
related goods. Additionally, the results indicate that the effect

Mean (SD)

Range

EFA
loading

CFA
loading

1.77 (0.78)

1-3

0.83

0.81

1.88 (0.65)

1-3

0.77

0.60

1.82 (0.84)

1-3

0.65

0.45

1.82 (0.73)

1-3

0.80

0.77

2.39 (0.76)

1-3

0.85

0.73

2.36 (0.73)

1-3

0.86

0.82

2.21 (0.62)

1-3

0.72

0.54

2.96 (2.05)

1-7

0.80

0.72

2.07 (1.56)
2.34 (1.78)

1-7
1-7

0.88
0.84

0.88
0.78

1.97 (1.52)

1-7

0.79

0.68

of perceived economic welfare on status consumption is

pronounced for highly educated individuals; thus offering
marketers of luxury or status goods a clearer picture of
individuals representative of their target market.

Discussion
The positive relationship between perceptions of perceived
economic welfare and status consumption (H1) is logical as
those who feel better off now than in the past may be more
willing to consume for status. It is important to note that this
relationship was positively moderated by education for the
more educated group (H3a). Thus, those consumers who
have worked to attain a higher level of education and, possibly
higher income due to higher education, may be willing to
consume for status. Perhaps they do not feel as self-conscious
or shameful about consuming for status as they feel they have
earned any economic gains they have obtained through
education. Thus, those consumers who feel they are
recovering economically from the recent economic
downturn, especially those with higher education levels, may
more likely be status consumers and/or excursionists who will
consume luxury products occasionally (Dubois and Laurent,
1994, 1995, 1996).
The finding of no relationship between status consumption
and consumer confidence (H2) is similar to that found by
Eastman and Eastman (2011). This result could be due to the
115

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

fact that the economy has been sluggish for several years
without a robust economic recovery. This can be seen in the
neutral perceptions the respondents had about consumer
confidence. If consumers do not see the future as being
different, it seems reasonable that consumer confidence
would not have an impact on the motivation to consume for
status. Additionally, it appears rational that education may
not moderate the relationship between consumer confidence
and status consumption (H3b) if individuals do not perceive a
better economic future with higher education, thus hindering
ones motivation to consume for status.
What luxury means can take different forms for many
different people and is dependent on the mood and
experience of the consumer (Weidmann et al., 2009,
p. 626). Beyond the idea of conspicuous consumption
(Veblen, 1899) the motivation for luxury may involve the fit
with ones self-image as well as rewarding oneself (Hudders,
2012). Based upon the results, we suggest that marketers
focus their efforts in this economic climate to those who do
feel they are doing better financially, rather than try to
discount to reach a larger market. Furthermore, appeals to
the status consumer may want to focus on the idea of earning
or deserving status products due to their hard work and
education rather than utilizing a conspicuous consumption
appeal. We suggest that marketers need to position their
products as a reward for a job well done for those who made
the sacrifice to get an education to be successful in todays
economy. This type of appeal may be especially effective for
those excursionist luxury consumers who may feel trepidation
about status consumption during tougher economic times.

numerous calls being made to voters to gain political opinion

data prior to Election Day. The current study used Google
voice to administer phone calls, which was the same method
used by the Republican Party to fundraise and verify voter
turnout during the 2012 presidential campaign (Hamby,
2012). Since the survey calls for the current research had a
very similar caller id signature to these political calls, it likely
prompted the large number of unanswered calls we
encountered in data collection. While these issues limited
the ability to increase the response rate of this survey, it is
important to consider that this study was exploratory in
nature. Another limitation of the current study is that the
phone list only included landline users. Future work might
aim to incorporate cell phone users since this consumer
segment might be strong supporters of status goods. For
instance, findings from Nielsen (2012) indicate that income is
positively related to smartphone ownership. Therefore, based
upon our findings which demonstrate the significance of
education (as a proxy for income) and its effect on the
relationship between consumer welfare and status
consumption, cell phone users, and particularly smartphone
users, are important consumers to include in future research.
Likewise, this study is limited to looking at only one region of
the country with a sample that is primarily Caucasian and
female; a more diverse sample both in terms of demographics
and geography would enhance understanding of the influence
of economic conditions on status consumption.
In closing, while shortcomings of this research exist, several
new insights are offered regarding the relationships among
consumer welfare, consumer confidence, status consumption
and education. Thus, this research hopes to spur additional
discussion and research on status consumption, what
motivates it, and what environmental factors influence it.

Future research and limitations

To gain a more complete understanding of how the economy
impacts status consumption, future research is needed to
determine the antecedents to status consumption as multiple
motivations for consuming for luxury exist (Hudders, 2012).
Truong et al. (2008) describe that status brands may be
purchased for internal (self-reward, quality, or self-directed
pleasure) or external (signal wealth, conspicuous
consumption) purposes. Research is needed to determine if
motivations for status consumption are more internally
(i.e. the idea of reward) or externally (i.e. the idea of
conspicuous consumption) driven as that would have
tremendous marketing implications on how to best reach
the status consumer.
Additionally, our data revealed no support for two of our
hypotheses. First, we failed to find evidence that consumer
confidence impacts status consumption, and second, we failed
to find evidence that education moderates the path between
consumer confidence and status consumption. Based on these
findings, it would be interesting for future research to
investigate explanations as to why these predictions were not
supported. Likewise, it would be interesting to determine if
there are any conditions in which consumer confidence does
impact status consumption. Furthering our understanding of
the association between consumer confidence and status
consumption would provide interesting insight to consumer
behavior researchers and to marketers designing
communications and promotions. While we used education
as a proxy for income, future work might also specifically
examine income, perhaps using a self-administered survey
which would be less invasive than a telephone survey.
A few limitations of this study should be noted. First, the
response rate of the telephone interviews was relatively low.
This was likely due to the 2012 president election and the

References
Anderson, J.C. and Gerbing, D.W. (1988), Structural
equation modeling in practice: a review and
recommended two-step approach, Psychological Bulletin,
Vol. 103, pp. 411-423.
Bagwell, L.S. and Bernheim, B.D. (1996), Veblen effects in a
theory of conspicuous consumption, American Economic
Review, Vol. 86 No. 3, pp. 349-373.
Bechtel, G. (2008), A dual source indicator of consumer
confidence, Sociological Methodology, Vol. 26 No. 1,
pp. 299-324.
Browne, M.W. and Cudeck, R. (1993), Alternative ways of
assessing model fit, in Bollen, K.A. and Long, J.S. (Eds),
Testing Structural Equation Models, Sage, Newbury Park,
CA, pp. 136-162.
Carty, S.S. (2009), Even luxury-car makers struggle, USA
Today, 14 January, available at: www.usanowtoday.com/
recession.htm
Census Bureau of the United States (2010), Profile of
general population and housing characteristics: 2010
demographic profile data, available at: http://factfinder2.
census.gov/bkmk/table/1.0/en/DEC/10_DP/DPDP1/
0400000US13
Design Week (2009), Luxury: bye-bye bling, Design Week,
Vol. 24 No. 28, p. 14.
Dubois, B. and Duquesne, P. (1993), The market for luxury
goods: income versus culture, European Journal of
Marketing, Vol. 27 No. 1, pp. 35-44.
116

The impact of economic perceptions on status consumption

Journal of Consumer Marketing

Dora Elizabeth Bock, Jacqueline Kilsheimer Eastman and Benjamin McKay

Volume 31 Number 2 2014 111 117

Dubois, B. and Laurent, G. (1994), Attitudes towards the

concept of luxury: an exploratory analysis, Asia Pacific
Advances in Consumer Research, Vol. 1, pp. 273-278.
Dubois, B. and Laurent, G. (1995), Luxury possessions and
practices: an empirical scale, European Advances in
Consumer Research, Vol. 2, pp. 69-77.
Dubois, B. and Laurent, G. (1996), The functions of luxury:
a situational approach to excursionism, Advances in
Consumer Research, Vol. 23, pp. 470-477.
Eastman, J.K. and Eastman, K.L. (2011), Perceptions of
status consumption and the economy, Journal of Business
& Economic Research, Vol. 9 No. 7, pp. 9-19.
Eastman, J.K., Goldsmith, R.E. and Flynn, L.R. (1999),
Status consumption in consumer behavior: scale
development and validation, Journal of Marketing Theory
and Practice, Vol. 7, pp. 41-52.
Eastman, J.K., Fredenberger, B., Campbell, D. and Calvert,
S. (1997), The relationship between status consumption
and materialism: a cross-cultural comparison of Chinese,
Mexican, and American students, Journal of Marketing
Theory and Practice, Vol. 5, pp. 52-66.
Egol, M., Clyde, A., Rangan, K. and Sanderson, R. (2010),
The new consumer frugality: adapting to the enduring
shift in US consumer spending and behavior, Booz
& Company, 24 February, available at: www.booz.com
Eng, T.-Y. and Bogaert, J. (2010), Psychological and cultural
insights into consumption of luxury western brands in India,
Journal of Customer Behaviour, Vol. 9 No. 1, pp. 55-75.
Fornell, C. and Larcker, D.F. (1981), Evaluating structural
equation models with unobservable variables and
measurement error, Journal of Marketing Research,
Vol. 19, pp. 39-50.
Gallup (2012), US economic outlook, available at: www.
gallup.com/poll/110824/gallup-daily-us-economic-outlook.
aspx
Gardyn, R. (2002), Oh, the good life, American
Demographics, Vol. 24 No. 10, pp. 31-35.
Hair, J.F., Black, W.C., Babin, B.J. and Anderson, R.E.
(2009), Multivariate Data Analysis, 7th ed., Prentice Hall,
Englewood Cliffs, NJ.
Hamby, P. (2012), Analysis: why Romney lost, CNN
Politics Election Center, available at: www.cnn.com/2012/
11/07/politics/why-romney-lost.
Han, Y.J., Nunes, J.C. and Dreze, X. (2010), Signaling
status with luxury goods: the role of brand prominence,
Journal of Marketing, Vol. 74, pp. 15-30.
Hu, L. and Bentler, P.M. (1999), Cutoff criteria for fit
indices in covariance structure analysis: conventional
criteria versus new alternatives, Structural Equation
Modeling, Vol. 6 No. 1, pp. 1-55.
Hudders, L. (2012), Why the devil wears Prada: consumers
purchase motives for luxuries, Journal of Brand
Management, Vol. 19 No. 7, pp. 609-622.
Husic, M. and Cicic, M. (2009), Luxury consumption
factors, Journal of Fashion Marketing and Management,
Vol. 13 No. 2, pp. 231-245.
Interbrand (2008), Consumer spending in a recession,
available at: www.interbrand.com/images/papers/33_IP_
Consumer_Spending_in_a_Recession.pdf

Julian, T.A. and Kominski, R.A. (2011), Education and

synthetic work-life earnings estimates, American
Community Survey Report, available at: www.census.gov/
prod/2011pubs/acs-14.pdf
Katona, G. (1975), Psychological Economics, Elsevier, New
York, NY.
Kilsheimer, J.C. (1993), Status consumption: the
development and implications of a scale measuring the
motivation to consume for status, unpublished doctoral
dissertation, Florida State University, Tallahassee, FL.
Kraus, S.J. (1995), Attitudes and the prediction of behavior:
a meta-analysis of the empirical literature, Personality
& Social Psychology Bulletin, Vol. 21 No. 1, pp. 58-75.
Lahart, J. and Dodes, R. (2010), Consumers tighten belts:
surprise drop in spending adds to doubt about the
recoverys strength, The Wall Street Journal, Vol. CCLV
No. 136, pp. A1-A2.
Ludvigson, S.C. (2004), Consumer confidence and
consumer spending, Journal of Economic Perspectives,
Vol. 18 No. 2, pp. 29-50.
Mason, R. (1992), Modelling the demand for status goods,
Association for Consumer Research Proceedings, pp. 88-95.
Mason, R.S. (2001), Conspicuous consumption: a literature
review, European Journal of Marketing, Vol. 18 No. 3,
pp. 26-39.
Netemeyer, R.G., Bearden, W.O. and Sharma, S. (2003),
Scaling Procedures: Issues and Applications, Sage Publications,
Thousand Oaks, CA.
Packard, V. (1959), The Status Seekers, McGraw Hill, New
York, NY.
Phau, I. and Cheong, E. (2009), How young adult
consumers evaluate diffusion brands: effects of brand
loyalty and status consumption, Journal of International
Consumer Marketing, Vol. 21, pp. 109-123.
Samuelson, R.J. (2010), Insecurity goes upscale: how the
recession has changed us, Newsweek, p. 24.
Silverstein, M.J. and Fiske, N. (2003), Luxury for the
masses, Harvard Business Review, Vol. 81 No. 4, pp. 48-57.
Nielsen (2012), Survey new US Smartphone growth by age
and income, Nielsen, available at: www.nielsen.com/us/en/
newswire/2012/survey-new-u-s-smartphone-growth-byage-and-income.html (accessed 22 October 2013).
Truong, Y., Simmons, G., McColl, R. and Kitchen, P.J.
(2008), Status and conspicuousness are they related?
Strategic marketing implications for luxury brands,
Journal of Strategic Marketing, Vol. 16 No. 3, pp. 189-203.
Veblen, T. (1899), The Theory of the Leisure Class, Penguin,
New York, NY.
Weidmann, K.-P., Hennigs, N. and Siebels, A. (2009),
Value-based segmentation of luxury consumption
behavior, Psychology & Marketing, Vol. 26 No. 7,
pp. 625-651.
Xuemin, Z. and Youning, H.E. (2007), Influence of
educational attainment on consumption, Frontiers of
Education in China, Vol. 2 No. 2, pp. 259-272.

Corresponding author
Jacqueline Kilsheimer Eastman can be contacted at:
jeastman@georgiasouthern.edu

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

117