Melissa A. Osborne Groves, Ph.D.
Associate Professor, Department of Economics
Towson University
Kai Johnson
Undergraduate Student in Economics
Towson University
Have you ever wondered why you bought that ugly Christmas sweater or why your sister grocery shops online? These were the types of questions that motivated our research on the determinants of college student consumption. We asked ourselves why some students make the spending decisions that they do, and what accounts for differences among students, realizing that from an economic perspective how people make decisions about even a Christmas sweater can have a significant and lasting economic effect. We reviewed the existing literature and surveyed students at Towson University in the Fall of 2018 to better understand the economic relationship between social media, materialism and consumption choices for students at a competitive regional public university.
Social Media, Materialism and Student Consumption
Existing literature contains many studies regarding social media, materialism or consumption, however, few consider the relationship between all three or how they influence student consumption decisions. Focusing primarily on materialism, Richins and Rudmin (1994) conclude that those high in materialism are more likely to want tangible items and their findings are supported and extended by the independent work of Richins (1994a, 1994b) who concluded that materialistic individuals are, “…strongly influenced by the perceptions of others when selecting products and prefer possessions that are publicly visible and highly prestigious.” Also, Goldberg et. al. (2003) who looked specifically at adolescents found those with high materialism shopped more, saved less and were more interested in new products. This area of the literature has a consistently found positive and significant relationships between materialism and consumption and we expect to find the same result in our research.
The research on social media and its impact has expanded significantly over the past twenty years but we are focused specifically on how social media interacts with online commerce through its influence on materialism. Kamal et. al. (2013) find that materialism is a consequence of social media usage and Vandana (2013) suggests that the media, in all forms, is among the leading cause of materialistic mindsets among youth. The work of Zhang et. al. (2017) begins with an overview of the literature on how consumer engagement in social media relates to e-commerce activities and concludes that there are significant disparities in the findings with some studies suggesting a positive relationship, some none and others a negative. Zhang et. al. (2017) present how this variation is consistent with a Becker type model of time allocation where consumers maximize utility by allocating internet time to social media, shopping, or a mixture of the two. Therefore, they argue that consumers engaged in social media are likely to be more informed which, however has little influence on the likelihood of purchase. These findings are important in part because of the growing use of social media as well as the possible negative impact of materialism on wellbeing as found in Dittmar et. al. (2014) that materialism was associated with higher negative emotions such as depression and anxiety.
The Evidence in Maryland
Our study expands upon what we know about consumer behavior by investigating what determines an individual’s level of materialism and how this then influences consumption decisions. After completing human subject training and Institutional Review Board approval, we surveyed Towson University students in the Fall of 2018. With over three hundred and fifty respondents we considered three distinct models: one attempting to model an individual’s level of materialism, and two using materialism to predict individual consumer decisions. We use a simple OLS model to estimate the relationship and present a section of the results in Table 1.
Table 1: OLS model estimating materialism (MVS)
| coeff. | std. error | p-value | |
| CBE or CHP students | 2.54 | 0.884 | 0.004 |
| Diversity of social media | 1.05 | 0.381 | 0.006 |
| Low Income | 2.7 | 1.702 | 0.113 |
| Black | 0.159 | 1.18 | 0.893 |
| Hispanic | -5.42 | 4.524 | 0.232 |
| Asian | 0.226 | 1.5 | 0.88 |
| Other Race | 5.99 | 2.303 | 0.01 |
| *Model also includes sex, age, college year, sexual orientation, financial aid recipient, employment status, other measures of household income, and if individual considers themselves a lgbtq ally. N = 354 | |||
Table 2: OLS and Logit models using materialism
| Ad Influence | Charity Influence | |||||
| OLA coeff. | Marg. effect | p-value | OLS coeff. | Marg. effect | p-value | |
| Materialism | 0.015 | 0.015 | 0 | -0.008 | -0.008 | 0.008 |
| College year | 0.058 | 0.061 | 0.031 | -0.072 | -0.08 | 0.004 |
| Sexual orientation | 0.168 | 0.111 | 0.022 | 0.007 | 0.005 | 0.839 |
| Male | -0.115 | -0.124 | 0.033 | -0.102 | -0.101 | 0.034 |
| *Models also include age, race, financial aid recipient, measures of household income, employment status and if individual was a student in the college of business and economics or the college of health professions. Reported p-values are from OLS models and N = 354. | ||||||
Our results suggest that students who utilize a greater diversity of social media forms, and those majoring in the College of Business and Economics or the College of Health Professions are more materialistic. These findings are statistically significant and consistent with the argument that students more concerned with materialistic possessions are likely to tend toward the higher status and pay majors as well as toward peers who are more like them. Also, while the literature is mixed on whether social media use has an impact on materialism, our findings suggest a positive relationship between the diversity of social media and materialism and is therefore consistent broadly with Kamal et. al. (2013) and Vandana (2013). We propose that inconsistencies in prior findings outlined by Zhang et. al. (2017) may be due to the measurement of social media – time or likelihood of purchase is not as important as the diversity of social media.
Our findings also indicate that household income and race may help to explain materialism, with students from lower income families and those not falling into standard race categories tending to be more materialistic. While the findings for low household income fall slightly outside of what is traditionally acceptable as being statistically significant in academic research (p < 0.10), the parameters are consistent with theory and therefore included in our model. The results for race are a bit more complicated while we find no statistically significant differences by race among standard race groups (Black, Hispanic, White and Asian). Those who self-identify as belonging to none of these groups are more materialistic than whites.
These estimates indicate that a senior is more than eighteen percent more likely to have a purchase decision impacted by advertisements than a freshman.
In addition to these findings, we are also interested in how materialism influences consumer decisions among a college aged population. More specifically, we look at how materialism influences the impact of advertising on the decision to buy and whether materialism increases the likelihood that an individual will prefer to purchase goods with a charity component. Using detailed models with standard controls, we anticipate that higher levels of materialism will be positively related to the influence of advertising and negatively related to the likelihood of a purchase with a charity component. To test our hypotheses, we run two models using both simple OLS and logistic regressions for a more intuitive interpretation of parameter estimates and selected results presented in Table 2.
We find that materialism has a positive and statistically significant impact on the influence of advertising, with a one-point increase in an individual’s materialism increasing the likelihood of purchasing a good because of advertising by 1.5 percentage points. Individuals who are more materialistic are thus more likely to be influenced by advertising; at the extremes the individual with the highest material values score is 70.5 percent more likely to be influenced by advertisements to purchase a specific item than the person with the lowest score. In addition, spending time in college increases the likelihood that an advertisement will influence your purchase decisions with each year increasing the likelihood by 6.1 percentage points. These estimates indicate that a senior is more than eighteen percent more likely to have a purchase decision impacted by advertisements than a freshman. Males are 12.4 percent less likely to be influenced by advertisements while identification as a heterosexual increases the likelihood of being influenced by an advertisement by 11 percentage points. These both, we hypothesize, may be due to the target audience for advertisements.
The second model in Table 2 predicts whether a purchase is influenced by a charity preference, meaning the individual decided to make the purchase decision in part because it was tied to some type of charitable contribution. Our results indicate that more materialistic individuals are less likely to purchase if the good or service is tied to a charity with a one unit increase in materialism resulting in a 0.8 percent decrease in the likelihood of purchasing a good with a charity component. Again, a more intuitive interpretation is that the individual with the highest material values score is 32.9 percentage points less likely to purchase an item because of a charity preference than is the person with the lowest material values score. In addition, effects of both college year and sex are statistically significant. Males are 10 percent less likely to make a purchase because of a charitable contribution. Each year in college reduces the likelihood by 8 percentage points that an individual will choose a good because it is tied to a charitable cause, meaning that seniors are more than 24 percentage points less likely to make these types of purchases.
Conclusion
Based on survey data from Towson University, our findings support previous conclusions that social media usage has a positive impact on materialism and that materialism has a statistically significant and meaningful impact on an individual’s consumption decisions. With growing consumer debt expected to reach four trillion dollars by the end of 2018, we believe that it is critical to better understand consumption decisions and how an increasingly prevalent social media may influence consumption through its impact on materialism. We hope that you did not buy that Christmas sweater.
References
- Dittmar H, Bond R, Hurst M, Kasser T. (2014). The relationship between materialism and personal well-being: a meta-analysis. Journal of Personality and Social Psychology, 107, 879–924.
- Goldberg, M. E., Gorn, G. J., Peracchio, L. A., & Bamossy, G. (2003). Understanding materialism among youth. Journal of Consumer Psychology, 13, 278−288.
- Kamal, Sara, Shu-Chuan Chu and Mahmood Pedram. (2013). Materialism, Attitudes, and Social Media Usage and Their Impact on Purchase Intention of Luxury Fashion Goods Among American and Arab Young Generations. Journal of Interactive Advertising 13(1), 27-40.
- Richins, Marsha L. and Floyd W. Rudmin. (1994). Materialism and economic psychology. Journal of Economic Psychology 15(2), 217-231.
- Richins, Marsha L. (1994a). Special possessions and the expression of material values. Journal of Consumer Research 21, 522–533.
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- Vandana, Usha Lenka. (2013). A review on the role of media in increasing materialism among children. Procedia – Social and Behavioral Sciences 133, 456-464.
- Zhang, Y., Trusov, M., Stephen, A. T., & Jamal, Z. (2017). Online Shopping and Social Media: Friends or Foes? Journal of Marketing, 81, 24-41.
https://www.cnbc.com/2018/05/21/consumer-debt-is-set-to-reach-4-trillion-by-the-end-of-2018.html