Spending the most on those who need it the least: gift givers buy more expensive gifts for affluent recipients

Abstract

Purpose

This study aims to add to the gift giving literature by examining how the wealth of a recipient impacts giver spending. The authors tested the hypotheses that givers spend more on wealthy (vs unwealthy) recipients, partially because givers anticipate a greater difference in gift-liking across expensive and cheap gifts when the recipient is wealthy, and partially because givers are more motivated to signal that they are of high financial status when the recipient is wealthy. The authors also tested whether givers’ tendency to spend more on wealthy (vs unwealthy) recipients attenuates when the recipient is someone with whom the giver has a negative (vs positive) relationship.

Design/methodology/approach

Eight experimental studies tested the hypotheses. These studies had participants act as givers, consider giving a gift to either a wealthy or unwealthy recipient and indicate how much money they would spend on the gift. Some studies included additional measures to test potential mediators, while another included an additional manipulation to test a potential boundary condition.

Findings

Gift givers spend more on gifts for wealthy (vs unwealthy) recipients, for two main reasons. On the one hand, givers are influenced by an other-oriented motive – they wish for their gift to be well-liked by the recipient and anticipate a greater difference in recipient gift-liking across expensive and cheap gifts when the recipient is wealthy. On the other hand, givers are influenced by a self-oriented motive – they wish to signal to the recipient that they are of high financial status, but this desire is stronger when the recipient is wealthy. Critically, givers are relatively unlikely to spend more on wealthy (vs unwealthy) recipients when they have a negative (vs positive) relationship with the recipient.

Research limitations/implications

The authors studied how the wealth of the gift recipient influences givers’ gift expenditure, but they did not examine the recipient’s perspective. Future research could address this by exploring whether recipients’ gift preferences vary based on their wealth.

Practical implications

Gift purchases account for a significant portion of worldwide consumer spending, making gift giving an important topic for consumers and marketers alike. The present research sheds light on a factor that has a notable impact on how much consumers spend on a gift when faced with a gift giving decision.

Originality/value

This manuscript contributes to the gift giving literature by exploring an important aspect that influences consumer gift expenditure (the wealth of the recipient), demonstrating a novel gift giving phenomenon [that givers spend more when giving to relatively wealthy (vs unwealthy) recipients], and shedding new light on the psychology of consumers in gift giving contexts (namely, how givers’ perceptions of recipient gift-liking, their desire to send signals of high financial status and their relationship with the recipient can influence their gifting decisions).

Citation

Reshadi, F. and Givi, J. (2023), "Spending the most on those who need it the least: gift givers buy more expensive gifts for affluent recipients", European Journal of Marketing, Vol. 57 No. 2, pp. 479-504. https://doi.org/10.1108/EJM-01-2022-0042