Featured Research

from universities, journals, and other organizations

Minority consumers will voluntarily pay more for goods and services to assert status, study shows

Date:
October 20, 2011
Source:
USC Marshall School of Business
Summary:
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 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.

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.

Related Articles


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.

In the concluding experiment with more than 500 participants, the researchers found that, as with Caucasians surveyed, when African-Americans were treated well, they did not indicate a willingness to pay more for goods or services even when race was made an issue. When African-American subjects were treated poorly, but race was not raised, they paid less.

Though the survey focused on African-Americans, USC Marshall Professor Jennifer Overbeck says the findings may be applicable to any group that has had a traditionally disadvantaged status throughout history.

"Minority consumers have tremendous buying power. We want to draw attention to the fact that these downstream forces of discrimination are important and to bring it to the attention of anyone who feels disadvantaged in the marketplace that he/she should not feel the need to prove themselves to people who don't deserve it by paying more," Overbeck said.


Story Source:

The above story is based on materials provided by USC Marshall School of Business. Note: Materials may be edited for content and length.


Cite This Page:

USC Marshall School of Business. "Minority consumers will voluntarily pay more for goods and services to assert status, study shows." ScienceDaily. ScienceDaily, 20 October 2011. <www.sciencedaily.com/releases/2011/10/111020122315.htm>.
USC Marshall School of Business. (2011, October 20). Minority consumers will voluntarily pay more for goods and services to assert status, study shows. ScienceDaily. Retrieved March 1, 2015 from www.sciencedaily.com/releases/2011/10/111020122315.htm
USC Marshall School of Business. "Minority consumers will voluntarily pay more for goods and services to assert status, study shows." ScienceDaily. www.sciencedaily.com/releases/2011/10/111020122315.htm (accessed March 1, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Sunday, March 1, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

How Facebook Use Can Lead To Depression

How Facebook Use Can Lead To Depression

Newsy (Mar. 1, 2015) Margaret Duffy of the University of Missouri talks about her study on the social network and the envy and depression that Facebook use can cause. Video provided by Newsy
Powered by NewsLook.com
The Best Foods to Battle Stress

The Best Foods to Battle Stress

Buzz60 (Feb. 26, 2015) If you&apos;re dealing with anxiety, there are a few foods that can help. Krystin Goodwin (@krystingoodwin) has the best foods to tame stress. Video provided by Buzz60
Powered by NewsLook.com
Sleeping Too Much Or Too Little Might Increase Stroke Risk

Sleeping Too Much Or Too Little Might Increase Stroke Risk

Newsy (Feb. 26, 2015) People who sleep more than eight hours per night are 45 percent more likely to have a stroke, according to a University of Cambridge study. Video provided by Newsy
Powered by NewsLook.com
Mayor Says District of Columbia to Go Ahead With Pot Legalization

Mayor Says District of Columbia to Go Ahead With Pot Legalization

Reuters - News Video Online (Feb. 25, 2015) Washington&apos;s mayor says the District of Columbia will move forward with marijuana legalization, despite pushback from Congress. Rough Cut (no reporter narration). Video provided by Reuters
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins