Consumers often indicate a preference for socially responsible products, yet this is not always reflected in their purchasing behaviors. What’s more, sometimes socially costly goods are priced higher due to the materials used (e.g., pre-cut fruits and vegetables in plastic packaging) or to discourage repeat purchasing that would increase the product’s harm (e.g., a bottle deposit or a higher gasoline tax). However, new research has found that a higher price tag for socially costly goods can actually increase rather than decrease some consumers’ preferences for them.
In a recently published Journal of Marketing Research article, Saerom Lee and Karen Page Winterich investigate when and why people of varying social classes make a purchase that is associated with high social costs, such as environmental harm from tourism or clothing made with synthetic fibers. They found that consumers from a subjectively high social class have a higher sense of entitlement to resources. This, in turn, provides a means of justifying purchases that are socially harmful and increases their product purchase intentions and choice. A higher price increases feelings of entitlement for these consumers, as it signals an “even” exchange of financial costs and social costs. In other words, upper-class consumers feel that the social cost is justified because they pay so much money for the product.
Higher prices increase feelings of entitlement for consumers in higher social classes, as they signal an “even” exchange of financial costs and social costs. In other words, upper-class consumers feel that the social cost is justified because they pay so much money for the product.
However, the effect of social class on entitlement disappears in certain circumstances. First, if a high-class individual has strong egalitarian values (i.e., if they do not believe that their interests are more important than others’), there is no effect. Second, if the social cost of purchasing a product is made salient, high-class individuals no longer feel entitled to the purchase. Additionally, high-class individuals have higher purchase intentions and willingness to pay if the social cost is less severe (e.g., a growing concern about tourism causing environmental damage at a beach) versus more severe (e.g., a two-year closure to recover from such damage). While such consumers still feel a high entitlement to socially costly products, this moderation effect occurs because they feel less able to justify their purchase.
For practitioners who are interested in segmenting their market by social class, these findings show how important pricing decisions are for socially-costly products. For high-class individuals, a higher price tag makes it easier to justify the social costs – unless that social cost is made salient or its severity is apparent. Policymakers who are interested in discouraging socially costly product purchases would do well to prime egalitarian values, remind consumers of the social cost of the purchase, and emphasize the severity of the social cost.
We asked the authors for deeper insights into this research and what inspired it.
Q: In your studies, you measured, rather than manipulated, subjective social class. Could consumers’ individual levels of subjective social class change depending upon contextual market factors? Is there anything managers could do to encourage (or discourage) these contextual factors?
A: Most of our studies focused on measured subjective social class, but subjective social class can be temporarily activated (see Study 1, follow-up C), consistent with how other cultural identities can be made contextually salient. While consumers have chronic perceptions of their subjective social class, consumers have experiences of being in a relatively higher as well as a relatively lower social class than others. It is these experiences that allow relatively higher or lower social class to be activated. Thus, marketing managers can temporarily activate motivations and characteristics of high or low social class via contextual marketing factors (e.g., ads or promotional materials, membership status programs, other retail strategies) encouraging consumers to think of themselves as a relatively higher or lower social class than others. To reduce social costs, we would recommend that companies do not emphasize a consumers’ higher status.
Q: Are there situations that could lead lower-class consumers to make similar socially costly choices as the upper-class consumers? Could they draw entitlement from elsewhere?
A: As we described in our response to the first question, chronically lower-class consumers may also be temporarily activated with cognitions of high social class by contextual factors and make similar choices as upper-class consumers. Also, there can be other situational factors that may encourage lower-class consumers to have a strong motivation to justify self-interested behavior, although it can be generally harder to activate entitlement in chronically lower-class consumers. For example, situational factors making salient self-oriented goals and desires of the consumers (e.g., goal-consistent products or discount promotions) may lead lower-class consumers to make socially costly choices, but it’s not clear such choices would occur due to entitlement. There is an opportunity to better understand the role of entitlement in consumer behavior.
Q: Given that past research has found that women (vs. men) report more concern about environmental issues, would you expect a gender difference for such socially costly purchase decisions?
A: It is possible that gender or other existing individual differences can play a role in purchase decisions of socially costly products. We found entitlement, which was experienced by both men and women, to underlie the purchase of socially costly products. However, it’s possible that when one is not feeling entitlement, the gender differences in concern for environmental issues would impact the likelihood of socially costly choices. Future research could also examine whether there are gender differences in entitlement.
Q: A boundary condition of the price entitlement effect is the relative salience of egalitarian values. How often or when do you think we observe naturally occurring egalitarian values in upper-class consumers? Or is this something that managers can make salient for these consumers?
A: Although upper-class consumers can be generally more self-focused and more sensitive to contextual factors heightening entitlement, we found in our Study 4 that egalitarian values could be temporarily made salient when the consumers completed a simple writing task. Much traditional marketing may focus on aspirational and status motivations, which would not make egalitarian values salient. However, this focus may be changing today as more and more brands position themselves around consumers’ self-transcendence values. For such products, they may be able to activate egalitarian values by exposing upper-class consumers to some socially responsible marketing messages regarding social justice or equity, though this was not tested empirically and would need further research.
Q: Organizations that aim to increase sustainability and social equity deal with more politicized social costs than others. In one of your studies (S6), you consider the moderating effect of the severity of the social cost. Do you see potential differences in highly politicized versus not highly politicized topics?
A: This is an interesting question. The price entitlement effect went away when social costs were severe, making the decision to purchase the product more difficult to justify. It’s hard to predict how politicization of social costs will interact with our effects, but it seems possible that highly politicized social costs can be harder to justify for certain consumers and weaken the overall strength of the price entitlement effect. At the same time, politicized social costs may not even be perceived as a social cost by some segments, given polarization regarding many of these issues. A key question to understand this is whether politicized social costs are perceived as more severe. If so, then the effect may be weakened for politicized social issues.
Q: As argued in your article, there is a growing concern among consumers for sustainability and social equality. Is this a topic you both have been considering for a long time? What made you feel it was time to research it now?
A: Yes, both of us have long been interested in studying topics related to sustainability and social equality, such as consumer motivations for green consumption and prosocial behavior. Impacts of climate change are increasingly evident in our daily life and the pandemic has also exacerbated social inequality. Consumers increasingly care about these social issues and consider socially responsible consumption decisions important. At the same time, consumers often feel conflicted when a personally more beneficial product involves social costs and seek a justification to purchase such a product. One particularly salient example that occurred around the time we started this project was the sale of peeled oranges in plastic containers. While this offering could meet a need for a specific segment of consumers that are unable to peel oranges, for other consumers it just removed nature’s protection of the orange, adding a socially costly protection in exchange for convenience that came with a higher price. More generally, we observed consumers feeling that because they’re paying to buy bottled water, the social costs associated with the additional plastic consumption are not a concern. A friend told us that this feeling ironically increased when the extra cost charged for bottled water was more salient after they moved to one of the states that charged bottle deposits, even though they weren’t returning the bottle for the deposit. Relatedly, a conversation with a friend expressing how they wished the library still charged fines, so they wouldn’t feel bad about keeping an overdue library book, was the motivation for one of our study contexts. It was our observation of such behaviors that led us to test this phenomenon empirically to understand the process underlying these choices.
Read the Full Study for Complete Details
Read the full article:
Saerom Lee and Karen Page Winterich (2022), “The Price Entitlement Effect: When and Why High Price Entitles Consumers to Purchase Socially Costly Products,” Journal of Marketing Research, 59 (6), 1141–60. doi:10.1177/00222437221094301
Go to the Journal of Marketing Research