Existing research demonstrates that financial constraints are widespread and influence consumer attention, preference, choice, and consumption in a variety of ways. Despite the growing knowledge of how financial constraints affect the consumer decision making process, less is known about its impact on post-purchase behavior. This work examines whether financial constraints impact an important post-purchase behavior—word-of-mouth—and in what direction. Seven studies show that financial constraints reduce purchase-related word-of-mouth. This effect emerges across consumers’ reported frequencies of discussing their purchases with friends and family, as well as their intentions, desires, and real decisions to engage in online word-of-mouth. This effect is explained by reduced anticipated pleasure of engaging in purchase-related word-of-mouth, which results from financially constrained consumers’ belief that rehearsing their monetary expenditures will reinforce negative feelings about their limited financial situation. This effect cannot be similarly explained by other accounts such as impression management or the desire to hoard informational resources. Further, the authors show that the reduction in anticipated pleasure from word-of-mouth is specific to sharing about one’s monetary expenditures. Thus, financial constraints reduce purchase-related word-of-mouth, but they do not universally decrease one’s propensity to share.
FC and WOM - Study 1 - Correlational Past Behavior
Four hundred adults located in the US were recruited through IPSOS, a leading market research panel provider, to complete this correlational survey.
FC and WOM - Study 2 - Correlational Chatroom
Four hundred and five adults on MTurk completed this study, which examined the association between financial constraints and choice of chatroom (purchases vs. local/state parks).
FC and WOM - Study 2 - Pretest
Forty three adults on MTurk responded to questions about potential conversation topics. This data was used to identify a chatroom topic for study 2.
FC and WOM - Study 3a - Mediation
Two hundred and fifty three adults, recruited through the IPSOS market research panel organization, completed a two condition (financial constraint vs. control) between-subjects design. This study examined the causal relationship between financial constraints and word-of-mouth and identified the role of reduced anticipated pleasure in driving the results.
FC and WOM - Study 3b - Serial Mediation
Two hundred and fifty six adults from MTurk responded to this two condition (financial constraints vs. control) between-subjects study. Replicating and extending the results of study 3a, this study additionally demonstrated that, for financially constrained consumers, the reduced anticipated pleasure of word-of-mouth arises from a belief that rehearsing monetary expenditures would reinforce negative feelings about their limited financial situation,
FC and WOM - Study 4 - Varying the Expenditure
Eight hundred and nine adults on MTurk completed this 2 (financial constraint vs. control) x 2 (expenditure: money vs. time) between-subjects design. This study showed that for expenditures of time, the effect of financial constraints on word-of-mouth was attenuated.
FC and WOM - Study 5 - Free vs Paid Event
Eight hundred and eleven adults completed this survey through MTurk. This study followed a 2 (financial constraint vs. control) x 2 (purchase cost: free vs. paid comedy show) between-subjects design, and demonstrated that word-of-mouth is only reduced for financially constrained consumers when the subject matter is a monetary expenditure (vs. a costless yet otherwise identical item).
FC and WOM - Study 6 - Purchases vs Gifts
Eight hundred and fifty six adults recruited through the IPSOS market research organization responded to this study. This study employed a 2 (financial constraint vs. control) x 2 (purchase vs. gift) between-subjects design, and demonstrated that financially constrained consumers were less likely to discuss new products only when those items were personal monetary expenditures (vs. gifts).
FC and WOM - Web Appendix - Study 1
Two hundred and two adults completed this two condition (financial constraint vs. control) between-subjects design on the MTurk platform. This study replicated the main effect, and examined the role of a series of purchase-specific characteristics.
FC and WOM - Web Appendix - Study 2
Four hundred and four adults completed this study. This study followed a 2 (financial constraint vs. control) x 2 (purchase: hedonic vs. utilitarian) between-subjects design, demonstrating the robustness of the main effect across both hedonic and utilitarian purchases.