Absolute and Relative Restriction and Consumer Behavior: Implications for Understanding Global Consumption

Our premise is that researchers have much to gain from an understanding of the global marketplace experiences of impoverished consumers. We argue that influences of absolute and relative restriction, across peoples and societies, are particularly critical. Therefore, this research makes progress by evaluating consumer data from diverse cultures and nations using hierarchical linear models, revealing ways restriction through poverty and consumption impacts well-being. We find that understanding both absolute and relative poverty is necessary for a more complete picture. Specifically, interactions show that absolute restriction moderates relationships between relative restriction and consumption and well-being by muting or exacerbating the effects. RESEARCH FRAMEWORK The role of various restrictions on consumer decision making has received some focus, guided by the premise that all people may face roadblocks to meeting wants and needs despite relative affluence and availability of goods and services (Botti et al. 2008). However, extreme and dire circumstances characterize the consumptive lives of poor citizens around the world, inspiring research on poverty, deprivation and restriction (Hill, Felice, and Ainscough 2007; Viswanathan, Rosa, and Ruth 2010). Recent statistics paint a grim picture and reveal that about three billion people survive on less than $2.50 per day, 640 million lack adequate shelters, and one in seven has no access to health care (http://www.povertycrisis.com). Of course, statistics fail to provide a complete understanding of the impact of poverty restrictions on consumer decision making worldwide. Previous research on subsets of impoverished people gives an indication that nuanced differences resulting from deprivation exist (Hill 1991; Hill and Stamey 1990), but most of this stream of work characterizes poverty in either relative or absolute terms and with smaller subsets of consumers. We advance such perspectives by considering both absolute and relative poverty with a diverse multinational sample. Accordingly, this study contributes to research by providing a novel examination of the impact of poverty-as-restriction on consumer well-being. Specifically, we evaluate poverty in absolute and relative terms, individually and in combination. Drawing from diverse theories, we expand on previous research by using a multifaceted perspective of impoverishment, juxtaposing absolute restriction (i.e., human development) with relative restriction (i.e., inequality). We are particularly interested in providing as broad a representation as possible to offer insights about the role of impoverishment on a subset of humanity. We continue this discussion by explaining the proposed framework and resulting hypotheses, followed by a description of the study sample and data. Next, we detail the multilevel methodology and analysis used to test our question. We then reveal our findings and highlight how results explain the nuanced role played by poverty-as-restriction on consumption, with implications for the relationship between consumption and well-being to guide consumer theory and research. Restriction and Consumer Behavior The general framework that underpins our hypotheses involving restriction reveals that the nature of consumption opportunities impacts the relationship between relative or absolute poverty and subjective evaluations of well-being (Zhong and Mitchell 2010). However, our position is that their interaction also impacts consumer well-being. As a result, perspectives of access to or restriction from goods and services used in this study are based on assessments of absolute material circumstances as well as relative evaluations of what others have (Easterlin 2004). Zagorski, Kelley, and Evans (2007) suggest that these goods and services may be viewed as serving primary needs, which are similar across persons and associated with basic survival, and status desires, which denote social standing and orient us relative to other people. …