How consumer confidence affects price conscious behavior: The roles of financial vulnerability and locus of control

Daniel P. Hampson, Shiyang Gong*, Yi Xie

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 Citations (Scopus)

Abstract

Despite their ubiquity in academic and commercial research, evidence of the usefulness of consumer confidence indices is mixed. To contribute to this debate, we examine the psychological mechanisms through which consumer confidence does (and does not) affect consumer behavior. We develop a conceptual model, which we test via structural equation modelling and moderated mediation analysis, using data from a sample of US consumers (n = 1,090). Rather than conceptualize consumer confidence as a single construct, our study is the first to distinguish between national consumer confidence and personal consumer confidence. Consistent with cognitive appraisal theory, personal consumer confidence mediates the relationship between national consumer confidence and perceived financial vulnerability, which in turn leads to increased price conscious behavior. Drawing on attribution theory, we find that external locus of control enhances the effects of national consumer confidence. We provide practical advice to economic forecasters, business analysts, marketers, and financial educators.

Original languageEnglish
Pages (from-to)693-704
Number of pages12
JournalJournal of Business Research
Volume132
DOIs
Publication statusPublished - Aug 2021
Externally publishedYes

Keywords

  • Attribution theory
  • Cognitive appraisal theory
  • Consumer confidence
  • Financial vulnerability
  • Locus of control
  • Price conscious behavior

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