Limited Money = Low Status? Interactive Effects of Financial Constraints and Power Distance Belief on Subjective Social Status and Purchase Types

While existing consumer research has widely used individuals' wealth and income levels as objective measures of social status, little is known about how individuals' experiences and feelings about their financial situations impact their perception of subjective social status. To address this gap, the current research delves into the relationship between individuals' feelings of financial constraint and inferences of social status, by introducing power distance belief (PDB) as a key factor. Further, we examine how subjective social status, established through the interaction between financial constraints and PDB, influences preferences for purchase types in the realm of consumer decision-making. Among individuals with high PDB, feelings of financial constraint increase the relative preferences for material over experiential purchases, while this effect is attenuated among those with low PDB. The results of three experiments support our hypotheses and identify the underlying mechanism. Our findings thus offer an initial answer as to how feelings of financial constraint shape consumers' status-related decisions and behaviors, highlighting the critical role of PDB in this dynamic.