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Trickle Down Spending: The Role of Income Inequality on Gift Spending Decisions

M. Alberhasky,Andrew D. Gershoff

Published 2023 in Journal of the Association for Consumer Research

ABSTRACT

Income inequality, or how much money one consumer earns relative to another, may affect sympathy and gift spending decisions. Earning a relatively higher-income compared to another consumer increases the amount given as a real gift for a relatively lower-income recipient (study 1). The effect is driven by heightened spending on relatively lower earners (study 2) and is mediated by situational sympathy for the lower-income recipients, leading to increased reported spending on gifts (study 3). Using the recipients’ earning effort to manipulate situational sympathy moderates gift spending, demonstrating that a higher-income consumer will not spend more on a relatively lower-income recipient who works fewer hours than the giver (study 4). Consumers are more likely to reciprocate an expensive gift from a lower- versus a higher-income earner (study 5). This research is among the first to document how a consumer’s relative income to another affects financial decisions.

PUBLICATION RECORD

  • Publication year

    2023

  • Venue

    Journal of the Association for Consumer Research

  • Publication date

    2023-06-26

  • Fields of study

    Not labeled

  • Identifiers
    DOI 10.1086/726424
  • External record

    Open on Semantic Scholar

  • Source metadata

    Semantic Scholar

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