Sarial-abi, G, Ulqinaku, A orcid.org/0000-0003-3456-6451, Viglia, G et al. (1 more author) (2023) The effect of financial scarcity on discretionary spending, borrowing, and investing. Journal of the Academy of Marketing Science, 51 (6). pp. 1214-1243. ISSN 0092-0703
Abstract
Past research indicates that individuals with scarce resources focus on urgent needs. We hypothesize and find that individuals with scarce financial resources have greater discretionary expenditures such that they engage in more discretionary spending, borrowing, and investing. We demonstrate that one possible explanation for why those with scarce financial resources have greater discretionary expenditures is because they have more optimistic future perceptions. We support our predictions using a sample of over 60,000 observations from a survey in rural India, two archival datasets from surveys in Italy and Germany, and two preregistered online experiments. We control, test, and rule out different alternative explanations. The results of this research extend the findings in the financial scarcity and discretionary consumption literature. Additionally, we provide actionable guidelines for managers and public policy makers on how to nudge individuals with financial scarcity.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © Academy of Marketing Science 2021, corrected publication 2021. This is an author produced version of an article published in Journal of the Academy of Marketing Science. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Financial scarcity; Future perceptions; Discretionary spending; Discretionary borrowing; Discretionary investing; Optimism |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Marketing Division (LUBS) |
Depositing User: | Symplectic Publications |
Date Deposited: | 23 Aug 2021 08:46 |
Last Modified: | 29 Nov 2023 15:54 |
Status: | Published |
Publisher: | Springer |
Identification Number: | 10.1007/s11747-021-00811-0 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:177304 |