Study finds minority consumers will voluntarily pay more for goods and services to assert status

[SoCalDem]

http://www.labspaces.net/114499/Study_finds_minority_consumers_will_voluntarily_pay_more_for_goods_and_services_to_assert_status

Friday, October 21, 2011


It has been well-documented that minorities are subject to discrimination in product pricing and customer service. What is startling is the result of a new study professors at the USC Marshall School of business in conjunction with University of San Diego's School of Business Administration, that shows that sometimes ill-treatment can make African-American consumers voluntarily pay more for goods and services than they would normally, as well as pay more than their Caucasian counterparts.

Aarti S. Ivanic, assistant professor of marketing at the University of San Diego's School of Business Administration; and Jennifer R. Overbeck, assistant professor of management and organization along with Joseph C. Nunes, associate professor of marketing at the University of Southern California's Marshall School of Business, set out to understand inequities in transactions. In their study, "Status, Race and Money: The Impact of Racial Hierarchy on Willingness-to-Pay," forthcoming in Psychological Science, the researchers found that African-Americans who felt their status was threatened by poor service because of their race were willing to pay more for products and services to assert their social standing.

While Caucasians and African-Americans showed equal interest in products such as headphones or luxury hotel upgrades in two studies conducted, researchers found that when race was explicitly activated (subjects were made aware of the stereotypes affiliated with their race), most African-American survey participants indicated a willingness to pay more for products than either Caucasian participants or other African-Americans for whom race was not raised. Meanwhile, when race was implicitly raised, the researchers found that African-American participants were less likely to counteract negative stereotypes and decreased their willingness to pay for products. However, what was also uncovered in this study was that African-American participants who strongly identified with their race had a lower "willingness to pay," suggesting that greater pride in group membership made them less vulnerable about their status.

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[virgogal]

1. Another day,another study. eom

[Manifestor_of_Light]

2. Something I noticed at work

while working at the courthouse.

The Black ladies were always carrying designer purses. Louis Vuitton, Gucci or something with designer initials on it.
A Black woman deputy was talking about her "Benz". It was old, and the color of a tomato, but it was a Benz.

I attribute it to insecurity about social standing. :shrug:

[uppityperson]

3. At family dinner a few yrs back conversation went like this "it's better to buy a $200 purse

that you really like than a cheap one you don't."

Aside form my unrelenting non-fashion sense and using a purse to simply carry things in, what? Those were the only 2 hcoices they could come up with. Odd.

[SoCalDem]

5. I DO like expensive purses, because they last forever, BUT

I prefer to buy a nice used one on Ebay for a pittance:)

[Manifestor_of_Light]

15. Yes, get em used.

My grandmother always bought cheap shoes and cheap purses and then wondered why they fell apart.

But then I have a real narrow foot, so it's either Italian shoes or sneakers for me.

[SoCalDem]

16. My husband wears a 10 A.. Can you even imagine how expensive his shoes are?

and rare too.. We have to special order his shoes.. Thank goodness, he's careful with them, and they are of such quality that we can have them re-soled/heeled:)

I have common feet, and find all kinds of bargains:)

[SoCalDem]

4. and attention to advertising.. I saw this when Visa started marketing their credits cards

as "regular" and "gold" (then on to black & platinum, and whatever else they came up with after that)..

It's just a card that ushers you into debt..:shrug:..no matter the color

I always laughed at my friend who paid extra for gold embossed checks.... I never cared what the check looked like.. It was just a way to give away my money:)

[uppityperson]

6. Platinum gives you extra insurance if you rent a car.

Why I keep one for that use.

[SoCalDem]

7. State Farm covers us nicely for rental cars

:)

[uppityperson]

8. They did me also but when I did get in an accident, the credit card picked up

what SF didn't, or it was the other way around. Credit card first then sf. At any rate, my SF person was happy since it ended up being less of a bad mark for my account.

I had gotten a couple windshield chips fixed at a glass place, not realizing they counted against me as accident claims. The glass people didn't tell me that. My SF guy told me that it is better for your record, to not get your rates raised, to not fix those chips if you live in a place where you get them more than once every few yrs, but to wait until it was worse. It costs $50 deductible to change windshield, but doesn't count as an accident

[frazzled]

9. I don't know about status

But I can see how when you are constantly put down and judged you might want to "pay more" to show you're "as good as." It's a losing proposition, however, I think, in the end.

This said, sometimes I shop for specific things at a Whole Foods that opened about 4 or 5 years ago on the near South Side of Chicago (mostly confined to meats, bulk herbs and spices, and a few specialty products I use). The clientele is at least half African-American. I have noticed how when I am cursing under my breath and saying I'm not paying 89 cents a lemon when I can get them 3 for a dollar at the little Italian greengrocer near my house, that many of the black shoppers have their carts filled with expensive produce and products. It might be part of this phenomenon the study is talking about. Or it might be that they are all just better off than me, and really don't mind paying the prices! It's certainly been good for me, though, to see that if you bring a "nice" store to African-American neighborhoods, they will come and buy. More businesses should think about that, you know.

[redqueen]

10. Status is very important to people.

We base so many decisions on what status we perceive others to have, what status we want to be perceived as having, etc. That being the case, it's not surprising that status symbols (such as more expensive things) would be used as a means of projecting the image of acheived status to others.

[SoCalDem]

11. It always tickles me when women buy fake designer purses

the people who can afford the "real" thing laugh at them, and their peers know they are buying fakes.. they just end up with a crappy looking purse that falls apart, and they are impressing no one:)

[redqueen]

12. It makes me sad.

Money and status still rules so much about our lives. Too many people still place so much importance on such idiotic things.

[SoCalDem]

13. If they paid a lot I would be sad too, but usually they pay very little

There's a convenience store near me that has these fakes.. I don't know why they have not been confiscated.. anyway, they sell for $20 or so.. who would think that a LV purse for $20 at a convenience store would be the real thing:)

For $20 on sale, they could buy a very nice looking bag on sale at a department store..and it would last a long time too..

[redqueen]

14. It's not the price but the desperation that strikes me.

That someone would be so desperate to appear to be more deserving of respsect (due to higher status) that they'd pay more for a lower-quality product.

[ZombieHorde]

17. I spent $30 on zombie comics today, so I feel I shouldn't be judging other people's purchases. nt

[nadinbrzezinski]

18. It does not surprise me

Part of the need to belong. In our society that is done with Vuitton bags.

For the record they can stay on shelf...both the real thing and fakes...but none would ever accuse me of being mainstream.

[SoCalDem]

19. I've never liked LV stuff.. except for the really old designs

Most of the designer stuff is not all that attractive

[nadinbrzezinski]

20. Well I used vuitton as an example

When growing up the cool kids wore designer jeans. I wore what was comfy. My best looking pair is generic. Funny how many into designer clothes shtick asked me for brand when in mexico...they could not believe it was all but designer. Revenge of the nerds I tell ya.

[SoCalDem]

21. My son's favorite clothing item was a pair of tire-store overalls

he bought for $2 at a thrift store.. :)

Had the company logo and the employee name still on them, "Gus"