Investigating consumers' responses to the Great Recession

Abstract

Purpose

This study aims to explore the economic impact of the Great Recession on consumers' economic attitudes and behaviors.

Design/methodology/approach

Data were collected through a questionnaire completed by 2,120 subjects. Eight propositions involving six constructs (i.e. “recessionary impact on others”, “economic knowledge”, “economic concerns”, “recessionary resignation” (as antecedents) and “financial prudence” and “propensity to postpone major purchases” (as outcomes)) and five consumer (age and gender) cohorts were tested through structural equation modeling.

Findings

Ten relationships, each grounded in behavioral economics theory, were tested. Nine were statistically significant. But unexpectedly, two significant relationships were negative. Specifically, their perceptions of “recessionary impact on others” and “economic concern” influenced consumers' financial prudence and major purchase postponement. As predicted, consumers' “recessionary resignation” influenced them to postpone major purchases, but did not impact their financial prudence. “Economic concerns” negatively influenced financial prudence, but failed to influence postponement. Financial prudence influenced propensity to postpone major purchases. Age status significantly influenced financial prudence and postponement, but only among the youngest (less than 29 years) and oldest (45+) cohorts. Results revealed the more women knew about the economy, the more inclined they were to postpone major purchases. Older women, in particular, were prone to recessionary resignation. Interestingly, the condition encouraged older women to be less financially prudent. Theoretical explanations for unexpected relationships are offered.

Originality/value

Managerial recommendations for promoting and positioning products during or in the immediate aftermath of recessionary situations are developed.

Citation

Strutton, D. and Lewin, J. (2012), "Investigating consumers' responses to the Great Recession", Journal of Consumer Marketing, Vol. 29 No. 5, pp. 378-388. https://doi.org/10.1108/07363761211247497