Tuesday, 21 August 2012

Why scarce goods can be psychologically more satisfying...

I have two girl friends who are constantly competing to see who can find the most desirable but rare item, be it a scrap of vintage lace, ethnic bangle or piece of studio pottery. 
The most prized purchase is, I’m afraid to say, always a one-off piece that the other hasn’t a hope in hell of acquiring. Both are stylish women, but neither is massively well-off. 
So their treasure-hunting requires time, ingenuity and a dose of deviance that consists of never, ever divulging where they got something from. 
Now forthcoming research* from the US sheds some light on this particular type of consumption.
Photo credit http://mrs-sun.deviantart.com/
When people experience economic hardship they attempt to alleviate the negative feelings this induces by acquiring goods that are hard to come by.                        Research published in the Journal of Consumer Research shows that financially deprived consumers prefer goods that are relatively unavailable to others, to offset the feeling that they are comparatively deprived. Many people judge how well-off they feel by comparing themselves to others. When experiencing financial hardship people render such comparisons impossible by acquiring goods for which there is no direct comparitor.

Social comparison is a powerful psychological force. How rich, attractive or successful we feel is always relative, depending on who we are comparing ourselves with, or whether we are comparing our present self with our past self. One person may be quite wealthy, but may actually not feel well-off because a) they are not as rich as their affluent friends or b) they are not as affluent as they have been in past times.

This is reflected in the questions asked in the Financial Wellbeing Index in the aforementioned study, reproduced here:

1. Compared to my financial position last year, my financial position this year is:
Much worse 1 2 3 4 5 6 7 8 9 Much better.
2. In comparison to most of my peers, I am financially:
Much worse off 1 2 3 4 5 6 7 8 9 Much better off.
3. Compared to my material possessions last year, my material possessions this year are generally:
Much worse 1 2 3 4 5 6 7 8 9 Much better.
4. In comparison to most of my peers’ material possessions, my material possessions are:
Much worse 1 2 3 4 5 6 7 8 9 Much better.
5. In comparison to last year, my ability to spend money freely is:
More constrained 1 2 3 4 5 6 7 8 9 Less constrained.

Sharma & Alter (2012) used this scale to measure how deprived the participants felt and found that deprived consumers preferred scarce (vs.abundant) goods when those goods seem relatively unavailable to others in their environment. If you find yourself selecting low scores on these items you may have a tendency to over-compare.

Comparing yourself with others is clearly a dangerous process and one unlikely to have a happy ending. Rest assured there will always, yes always, be someone better off or more beautiful than you. 
Women’s magazines are a classic example – after being saturated with images of impossibly perfect airbrushed models the female reader inevitably feels worse about her looks. 
And when it comes to the state of our finances research suggest that consumers might seek scarce goods for retributive purposes. By acquiring goods that others can’t get hold of people can “get even” with their better-off peers. By consuming limited resources, they necessarily deprive others from enjoying the same privilege. Once girl friend A has snapped up that classic french 1920’s beaded clutch, there’s one less out there for girl friend B to chance upon.

The authors of the US study claim that deprived consumers acquire scarce products to set themselves apart from their financially superior peers. By stressing differences between themselves and those peers, consumers can mitigate feelings of self-threat, because after all evaluations based on social comparison are only meaningful when they are formed relative to similar peers. In other words, acquiring scarce goods might diminish feelings of inferiority relative to financially superior peers by creating the sense that those peers are no longer suitable comparison standards. Then again there's just that satisfying feeling that comes from being an individual and not being swept along with the masses.....

* JOURNAL OF CONSUMER RESEARCH, Vol. 39 ● October 2012