When and Why Consumers (Erroneously) Believe Income Impacts the Enjoyment of Consumption Experiences

Abstract

We examine how people (as observers) anticipate levels of happiness from psychological consumption experiences (e.g., learning a new language or visiting a park). All else being equal, we propose and demonstrate that people expect differences in happiness based on income. Specifically, we show that relative to observers themselves, individuals simultaneously expect low-income consumers to enjoy psychological consumption experiences less and high-income consumers to enjoy them more. This is because consumers hold a lay theory that human needs must be fulfilled in a sequential, linear manner, which leads to income-based inferences of need prioritization. Thus, observers simultaneously believe that low-income consumers do (and should) prioritize their low-level physical needs first, but high-income consumers (who have presumably already fulfilled their physical needs) can prioritize their high-level psychological needs. Critically, we demonstrate that these lay theory-driven inferences are faulty, showing that the priority level assigned to these needs and the actual happiness resulting from psychological consumption experiences do not follow the predicted pattern. Namely, income either has no relationship with actual happiness (visitors to theme parks, sporting events, and concerts) or the reverse relationship, such that lower-income consumers report greater happiness than higher-income consumers (secondary data from a major league professional sports team).