More Than Just a Constraint: Budget Constraints Shape Preference

Jeffrey Larson, Brigham Young University, USA
Ryan Hamilton, Emory University, USA
Budget constraints are supposed to act independently of preference formation. We demonstrate that budget constraints, rather than simply limiting expensive purchases, actually shape preferences because consumers devalue products outside their budget. We further show that consumers become sensitized to quality differences in products within their budget range.
[ to cite ]:
Jeffrey Larson and Ryan Hamilton (2011) ,"More Than Just a Constraint: Budget Constraints Shape Preference", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.