Assessing Conspicuous Consumption Behavior in a Multicultural Society: a Mediation Approach of Acculturation Dimensions on Chinese Ethnic Identification

ABSTRACT - This study is an investigation of the mediating effect of acculturation dimensions on the relationship between Chinese identification and conspicuous consumption of ethnic Chinese consumers in Canada. The primary objective of this study was to develop a theoretical framework to achieve an in-depth understanding of Chinese consumers’ emphasis on conspicuous consumption. The research site selected for this study was Toronto, Canada. A survey questionnaire was used and 254 ethnic Chinese respondents participated. The results revealed a strong relationship between Chinese identification and conspicuous consumption. The study also found English language usage and English Canadian mass media exposure as mediators of acculturation. Managerial implications and future research are also discussed.

Citation:

Joseph Chen, May Aung, Lianxi Zhou, and Vinay Kanetkar (2005) ,"Assessing Conspicuous Consumption Behavior in a Multicultural Society: a Mediation Approach of Acculturation Dimensions on Chinese Ethnic Identification", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 224-231.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Pages 224-231

ASSESSING CONSPICUOUS CONSUMPTION BEHAVIOR IN A MULTICULTURAL SOCIETY: A MEDIATION APPROACH OF ACCULTURATION DIMENSIONS ON CHINESE ETHNIC IDENTIFICATION

Joseph Chen, Millward Brown Goldfarb, Canada

May Aung, University of Guelph, Canada

Lianxi Zhou, University of Guelph, Canada

Vinay Kanetkar, University of Guelph, Canada

[The authors thank the two anonymous ACR reviewers= helpful comments on a previous draft of this paper.]

ABSTRACT -

This study is an investigation of the mediating effect of acculturation dimensions on the relationship between Chinese identification and conspicuous consumption of ethnic Chinese consumers in Canada. The primary objective of this study was to develop a theoretical framework to achieve an in-depth understanding of Chinese consumers’ emphasis on conspicuous consumption. The research site selected for this study was Toronto, Canada. A survey questionnaire was used and 254 ethnic Chinese respondents participated. The results revealed a strong relationship between Chinese identification and conspicuous consumption. The study also found English language usage and English Canadian mass media exposure as mediators of acculturation. Managerial implications and future research are also discussed.

INTRODUCTION

In Asia, luxury products convey the importance of status and face giving in Asian culture. Before the Asian crisis of 1997-1998, East Asia and Southeast Asia were the largest luxury goods market in the world (Wong and Ahuvia 1998). Luxury goods companies regard Asia as the area of greatest importance. Louis Vuitton-Moet Hennessey, for example, sells over half of its production to Asians, as do many other cognac and luxury goods companies (Schutte and Ciarlante 1998). Conspicuous consumption is also true for Chinese consumers who put a strong emphasis on luxury brands. Particularly, they prefer products that have symbolic connotations. To date, not many studies have been conducted to understand the crucial role of conspicuous consumption for the Chinese consumer segment, in particular the ethic Chinese consumers in other host cultural environment.

In Canada, Chinese immigrants account for 3.7 percent of the population according to the Census 2001 data. The majority of these Chinese immigrants live in the metropolitan centers of Canada. In Toronto (GTA), Canada’s largest city, about nine percent of the population is Chinese. (i.e. 435, 685 of 4, 647,960 residents) The uniqueness of Chinese consumers in Canada is not expected to vanish as newcomers "melt" into Canadian society. Rather, Canadian society’s growing acceptance of a multicultural social mosaic may help Chinese Canadians retain their cultural characteristics (Lee and Tse 1994). This study hopes to provide insights about the importance of Chinese Canadians as a consumer group in a multicultural society. Specifically, this study focuses on conspicuous consumption (Mason 1981, Veblen 1925), Chinese identification and acculturation dimensions (Laroche 1998).

RESEARCH OBJECTIVES AND CONCEPTUAL BACKGROUND

This study focused on Chinese immigrants’ identification with their original culture and the influence of host cultural traits on their consumption behavior in a multicultural society. This study tired to fill the gap in the literature with a pragmatic development of a framework for understanding the conceptual relationships of acculturation, Chinese identification and conspicuous consumption.

Specifically the primary objectives of this research were:

1. To examine the relationship between Chinese identification and conspicuous consumption.

2. To examine the mediating effect of acculturation dimensions on the relationship between Chinese identification and conspicuous consumption.

Ethnic identification is defined as "the retention or failure to lose aspects of an individual’s culture of origin". This retention of the culture of origin is expressed through attitudes, values or behaviors (Laroche, Kim, Hui and Tomiuk 1997:35). McCracken (1986) views consumption as partially a cultural phenomenon and supports the idea that cultural variables such as ethnic identification can be strongly linked to consumer behavior. Based on the ethnic identification concept, a person’s strong ties with his or her original culture exert important influences over the person’s behavior. Some studies looked at the impact of ethnic identification on consumption. Most findings in this framework indicate that the strength of ethnic identification has a positive correlation with ethnic product consumption (Chung and Fisher 1999; Deshpande, Hoyer and Donthu 1986). However, one also needs to take into account the changes in ethnic values over time.

Acculturation is often defined as a linear, bi-polar process through which individuals give up their traditional cultural values and behaviors and their ethic identities as they take on the values and behaviors of the dominant social structures (Duan and Vu 2000). Berry (1990) has identified four modes of acculturation associated with different levels of adoption of the host culture based on two considerations, first, the extent to which the individual or group feels a sense of identification with the culture of origin, and second, the need to relate to the host culture. The four modes of acculturation are:

1. Integration: the acculturating individual adopts some of the host culture while at the same time holding on to his/her own culture (and helping to change gradually the nature of the host culture).

2. Separation: the acculturating individual shuns interactions with the host culture while trying to maintain his/her original culture.

3. Assimilation: the acculturating individual adopts the host culture over time while gradually forgetting his/her original culture.

4. Marginalization: the individual feels rejected by the host culture but has no desire to maintain the culture of origin.

However, Chung (2000) indicated that acculturation modes are not mutually exclusive, and they may change over time and over different periods.

FIGURE 1

MEDIATION MODEL

There are very few studies that looks at the effect of acculturation on Asian consumers’ perceptions toward the purchase of conspicuous products.

Conspicuous consumption is not a recent phenomenon and can be described as a universal phenomenon. There is evidence of such behavior in the earliest societies. The economic extravagances and excesses of many individuals and social groups have been well documented (Mason 1981). Yet, it is probably more prevalent in cultures that stimulate materialism. Veblen (1899) proposed that conspicuous consumer sought to impress others with his wealth in order to win their esteem and thus, hoped to maintain or improve his social status. Mason (1981) proposed that conspicuous consumption is concerned primarily with the ostentatious display of wealth. Motivated by a desire to impress others, it is a form of consumption inspired by the social rather than economic or physiological utility of products.

Chung and Fischer (2001) studied Hong Kong consumers and their conspicuous consumption behavior in Canada. The researchers mentioned Hong Kong as a society where conspicuous consumption rules and they wanted to find out if this consumption behavior would still be transparent among Hong Kong people who have immigrated to Canada. Their study failed to support the notion that conspicuous consumption is related to a person’s ethnicity. They later argued that fashion consciousness might not be appropriate to measure for conspicuous consumption or at least for Hong Kong Chinese. To date, there is no other research that proposed a model to validate the mediating effect of 'acculturation’ toward the relationship between 'conspicuous consumption’ and Chinese 'ethnic identification’.

RESEARCH FRAMEWORK

This study proposes a model that encompasses the following components:

1. Ethnic Identification: Chinese Identification and Attachment

2. Conspicuous consumption (Ostentation, materialism, and status consumption).

3. Acculturation (English language use, English Canadian mass media exposure, English Canadian social interaction and English Canadian identification and attachment)

The model for 'Chinese identification and attachment’, 'acculturation’ and 'conspicuous consumption’ is depicted in Figure (1).

The focal point of the model is to test the mediating effect of 'acculturation’ dimensions on the relationship between 'Chinese identification’ and 'conspicuous consumption’. The independent variable is 'Chinese identification’ and the dependent variables are 'conspicuous consumption’ dimensions. The mediating variables are the 'acculturation’ dimensions. In this model, arrows show the direction of the postulated influence indicating causality between components. The model assumes that there is a one-way flow of causation.

HYPOTHESES

The following hypotheses are addressed in this study:

H1: There is a significant direct relationship between 'Chinese identification and attachment’ and 'conspicuous consumption’ for Chinese consumers in Canada.

H2: There is a significant mediating effect of the English language use on the relationship between 'Chinese identification and attachment’ and 'conspicuous consumption’: the higher the usage of the English language, the less the ethnic Chinese identifies with Chinese culture and the lower their propensity for conspicuous consumption.

H3: There is a significant mediating effect of English Canadian mass media exposure on the relationship between 'Chinese identification and attachment’ and 'conspicuous consumption’: the higher the exposure to English Canadian mass media, the less the ethnic Chinese identifies with Chinese culture and the lower the propensity for conspicuous consumption.

H4: There is a significant mediating effect of English Canadian social interaction on the relationship between 'Chinese identification and attachment’ and 'conspicuous consumption’: the higher the level of social interaction with English Canadians, the less the ethnic Chinese identifies with Chinese culture and the lower the propensity for conspicuous consumption.

H5: There is a significant mediating effect of English Canadian identification and attachment on the relationship between 'Chinese identification and attachment’ and 'conspicuous consumption’: the higher the level of attachment to English Canadian culture, the less ethnic Chinese identifies with Chinese culture and lower the propensity for conspicuous consumption.

In this study, it was expected that the acculturation and ethnic identification model is linear. However, this expectation is somewhat speculative, as some researchers found acculturating groups might not always follow the traditional acculturation model, in some instances the acculturating group tends to over-acculturate (Wallendorf and Reily 1983, and Penaloza 1994).

TABLE 1

SIMPLE REGRESSION RESULTS

(CHINESE IDENTIFICATION) (N=254)

RESEARCH METHODOLOGY

This study was undertaken in the multiethnic metropolis of Toronto, Canada. It is the largest city in Canada and is home to almost half a million ethnic Chinese consumers. Some of the world’s top luxury brand companies Cartier, Louis Vuitton, Prada, Chanel and Gucci can be easily sourced in Toronto. Therefore, it is an ideal city for this research study. This study applied the drop and collect survey technique. A response rate similar o that for a face-to-face survey can usually be achieved with this technique (Benard 1994).

A purposive sampling was used for this research. Although purposive sampling may introduce some bias to the study and limit the external validity, a random sampling would be unlikely to produce a sufficient number of ethnic Chinese Canadian respondents across Canada. Half of the respondents were professionals and the other half were students. Ethnic Chinese consumers from Taiwan who reside in Canada were gathered from the four Taiwanese cultural organizations in Toronto and a total of 254 subjects participated in the study.

The Questionnaire and the Data Analysis

The questionnaire included scales representing the Chinese Canadian acculturation dimensions, Chinese Canadian identification and attachment, and conspicuous consumption. The acculturation and ethnic identification scales were adopted from Laroche, Kim and Tomuik (1998) and comprised of 21 items (4 dimensions) and 9 items (1 dimensions) respectively. The measurement for conspicuous consumption contained three different components. The first component was adopted from Marcox, Filiatrault and Cheron (1997). The second component, the materialism scale was adopted from Richins and Dawson (1992). Materialism Success represents the use of possessions as an indicator of success in life, which corresponds to the third component of conspicuous consumption described in the literature review. The third component, a scale measuring conspicuous consumption was adopted from Eastman, Goldman, and Flynn (1999).

The questionnaire was subjected to a two-stage pre-test. The Statistical Package for Social Science (SPSS Version 10.0) was used to conduct the statistical analysis. Factor analysis was first conducted to reduce the number of scale items to factors representing those items.

RESULTS

A total of 254 surveys were collected from Chinese Canadians. The response rate was approximately 99% of distributed surveys. The survey respondents consisted of 46.5% students and 48% professionals. Most respondents were born in Taiwan. Sixty-three percent of the respondents had lived in Canada for more than six years. Fifty three percent of the sample were male.

Chinese Identification and Conspicuous Consumption

The first hypothesis was supported. The first regression analysis of Chinese identification was found to be influential and significantly explained 4.2% variance of ostentation (standardized Beta=0.214, p<0.000), 2.7% variance of materialism (Standardized Beta=0.175, p<0.000) and 2.3% variance of status (standardized Beta=0.165, p<0.000). Refer to Table 1 for simple regression results for Chinese identification.

The first hypothesis was supported. There is a relationship between Chinese identification and conspicuous consumption. Chinese consumers who have a stronger Chinese identification ostentatiously display their wealth are materialistic, and strongly prefer status-orientated products.

Mediating Effect of Acculturation Dimensions

First regression analysis was performed to examine the effect of Chinese identification on acculturation dimensions (Baron and Kenny 1986). Next, second, third and fourth regression analyses were performed to test for mediation effect. Equation 1 regressed conspicuous consumption (dependent variables: 1. ostentation, 2. materialism and 3. status) on Chinese identification (independent variable). Next, regression analysis was performed on each of the three conspicuous consumption dimensions on both Chinese identification and each of the acculturation dimensions (mediators). Equation 2 was on English language use, equation 3 as on English Canadian media influence, equation 4 was on English Canadian social interaction and equation 5 was on English Canadian attachment and these were examined independently. The criteria used to test the relationships proposed in the conceptual framework are adjusted R squared, change in R squared, variance inflation factor (VIF), regression coefficients, predicted value and residuals. Refer to Table 2.1 (simple regression), Table 2.2, Table 2.3 and Table 2.4 for multiple regression results.

TABLE 2.1

MULTIPLE REGRESSION ANALYSIS (N=254)

REGRESSION ANALYSIS 3.1 (CHINESE IDENTIFICATION)

The independent variable, the mediating variables as well as the dependent variables were scrutinized and divided into three steps of analyses. First, Chinese identification must affect the four mediating variables in Step 1.

Second, Chinese identification must affect the three conspicuous consumption measures in Step 2. Third, the acculturation dimensions must affect the three conspicuous consumption measures in Step 3.

If all these conditions hold in the predicted direction, then the effect of Chinese identification on the three conspicuous consumption measures must be less in Step 3 than in Step 2.

The second hypothesis was partially supported. In Step 1, Chinese identification explained 3.7 percent of the variance for English language use (standardized Beta=-0.203, p<0.001). In Step 2, Chinese identification explained: 1) 4.2 percent of the variance in ostentation (standardized Beta=0.214, p<0.001), 2) 2.7 percent of the variance in materialism (standardized Beta=0.175, p<0.001) and 3) 2.3 percent of the variance in status (standardized Beta=0.165, p<0.01). With the addition of English language use to Chinese identification in Step 3 among the three conspicuous consumption measures, only ostentation was affected by English language use (standardized Beta=0.162, p<0.01). English language use holds all the conditions in the predicted direction proposed by Baron and Kenny (1986). Further, the effect of Chinese identification on ostentation is less in Step 3 (standardized Beta=0.207) than in Step 2 (standardized Beta=0.214). There is a mediation of English language use on the relationship between Chinese identification and conspicuous consumption.

Therefore, the second hypothesis is partially supported by a significant influence of English-language-use on the relationship between Chinese identification and ostentation. The significant mediating effect supported the original notion. These findings indicate that Chinese consumers who use more English language identify and attach less with their Chinese culture and tend not to show off their wealth as a form of conspicuous consumption.

The third hypothesis was again partially supported. Chinese identification explained 2.7 percent of the variance for English Canadian media use in Step 1 (standardized Beta=-0.15, p<0.001). In Step 2, Chinese identification explained: 1) 4.2 percent of the variance in ostentation (standardized Beta=0.214, p<0.001), 2) 2.7 percent of the variance in materialism (standardized Beta=0.175, p<0.001) and 3) 2.3 percent of the variance in status (standardized Beta=0.165, p<0.01). With the addition of English Canadian media-use in Step 3 among the three conspicuous consumption measures, only ostentation was affected by English Canadian media use (standardized Beta=0.207, p<0.001). English Canadian media-use holds the conditions of the three steps only for ostentation. The effect of Chinese identification on ostentation is less in Step 3 (standardized Beta=0.212, p<0.001) than in Step 2 (standardized Beta=0.214, p<0.001). This indicates that English Canadian media use mediates the relationship between Chinese identification and conspicuous consumption.

The third hypothesis was partially supported by a significant influence of English media on the relationship between Chinese identification and ostentation. The findings indicate the original notion that Chinese consumers who have less exposure to English Canadian media would identify more with Chinese culture and place more emphasis on conspicuous consumption.

Hypothesis four was not supported. In step 1, Chinese identification explained 24 percent of the variance for English Canadian social interaction (standardized Beta=-0.168, p<0.01). In Step 2, Chinese identification explained: 1) 4.2 percent of the variance in ostentation (standardized Beta=0.214, p<0.001), 2) 2.7 percent of the variance in materialism (standardized Beta=0.175, p<0.001) and 3) 2.3 percent of the variance in status (standardized Beta=0.165, p<0.01). However, in Step 3 English Canadian social interaction did not predict the three conspicuous consumption measures. As a result, hypothesis four was not supported.

TABLE 2.2

MULTIPLE REGRESSION ANALYSIS (N=254)

REGRESSION ANALYSIS 2: OSTENTATION (CONSPICUOUS CONSUMPTION)

TABLE 2.3

MULTIPLE REGRESSION ANALYSIS (N=254)

REGRESSION ANALYSIS 3: MATERIALISM (CONSPICUOUS CONSUMPTION)

TABLE 2.4

MULTIPLE REGRESSION ANALYSIS (N=254)

REGRESSION ANALYSIS 4: STATUS (CONSPICUOUS CONSUMPTION)

Hypothesis 5 was not supported. This hypothesis further noted that the higher the Chinese consumer identify and has an attachment to the English Canadian culture, the Chinese consumers identify less with Chinese culture and have a lower propensity to conspicuously consume. In Step 1, Chinese identification did not affect English Canadian identification. In Step 2, Chinese identification explained: 1) 4.2 percent of the variance in ostentation (standardized Beta=0.214, p<0.001), 2) 2.7 percent of the variance in materialism (standardized Beta=0.175, p<0.001) and 3) 2.3 percent of the variance in status (standardized Beta=0.165, p<0.01). In Step 3, English Canadian attachment did not predict the three conspicuous consumption measures and the significant levels for all of them are over the recommended 0.05 levels. As a result, hypothesis 5 was not supported.

DISCUSSION

The findings provide support to previous findings about the relationship between ethnic identification and conspicuous consumption (Laroche, Kim and Tomiuk 1998). This compliments existing literature, which presents that conspicuous consumption is practiced heavily and holds cultural meanings among East Asians (Schutte and Ciarlante 1998; Wong and Ahuvia 1998; Piron 2000).

Chinese Identification and Conspicuous Consumption

As expected, a relationship was found between Chinese identification and conspicuous consumption. The findings further indicate that the Chinese consumers who identify more with Chinese culture are more likely to practice conspicuous consumption. Existing literature also suggests that conspicuous consumption is a part of Chinese culture. A qualitative study conducted by (Chen and Aung 2003) indicated that the concept of face, collectivism, power distance and competitiveness are Chinese cultural orientations that motivate conspicuous consumption among Chinese consumers. This study further supports the notion that conspicuous consumption is a part of the Chinese culture and it is a way of life shared by this particular group of consumers.

Acculturation

Chinese identification was found to be positively related to conspicuous consumption. Nevertheless, the two acculturation dimensions mediated the relationship between Chinese identification and ostentation. Specifically, English language use and English Canadian media are mediators of ostentation. The results indicate a lower usage of the English language and a lower exposure to English mass media would increase Chinese identification and conspicuous consumption. It may be that the Canadian multicultural policy encourages immigrants to preserve their original culture. In most ethnic communities, especially Chinese communities in Toronto, immigrants have access to services such as ethic television stations, Chinese shopping malls, Chinese community centers and Chinese restaurants. Chinese consumers who are more attuned with Chinese culture can speak only Chinese and can gain exposure to Chinese media to feel more "Chinese" and thus preserving their culture. The results support ethnic affirmation identified by Berry (1986) that immigrants would choose to retain their original culture values and reject behaviors typical of their new cultural environment. This kind of behavior can last for years as acculturation may take much longer than one would expect (Lee and Tse 1994)

The results also indicate that English Canadian social interaction and English Canadian identification are not mediators. Chinese consumers’ social interaction with English Canadians and their identification with the Canadian culture generally have no impact on their conspicuous consumption behavior. However, there is a positive correlation of English language usage on English social interaction and English Canadian identification. The results also support the bi-level model of immigrant adaptation that immigrants can acquire traits of the host culture while maintaining traits of their original culture (Laroche, Kim and Tomuik 1997).

The findings clearly demonstrate that the relationship between Chinese identification and conspicuous consumption is extremely robust. English language usage and mass media exposure as mediators of acculturation are consistent with findings from other studies (Klien 1987; O’Guinn & Meyer 1974) Overall, the traditional assimilation mode of acculturation should not be used to study Chinese immigrants in Canada as the Canadian multicultural society allows immigrants to preserve their home culture. Therefore, the separation mode and integration mode of acculturation could be better models to examine immigrant consumers in Canada.

MANAGERIAL CONTRIBUTIONS

This study also provides invaluable managerial contributions for the marketing of multinational luxury durable brands, and hedonic companies who have domestic operations in Canada. It showed that Chinese consumers place significant emphasis on conspicuous consumption. The findings indicate that the Chinese Canadian consumer segment could be a lucrative consumer market for luxury brand companies. However, the marketing strategy adopted for the Chinese Canadian market needs to be different from those in the traditionally affluent Anglophone consumer markets.

As a result, consumer products and durable goods companies should work closely with vendors in the Chinese-Canadian community to effectively sell their products. Marketers should take advantage of local marketing to customize their offerings to the consumers in these neighborhoods.

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