Perceived Risk, Individual Differences, and Shopping Orientations


H. Lee Mathews, John W. Slocum, Jr., and Arch G. Woodside (1971) ,"Perceived Risk, Individual Differences, and Shopping Orientations", in SV - Proceedings of the Second Annual Conference of the Association for Consumer Research, eds. David M. Gardner, College Park, MD : Association for Consumer Research, Pages: 299-306.

Proceedings of the Second Annual Conference of the Association for Consumer Research, 1971     Pages 299-306


H. Lee Mathews, Pennsylvania State University

John W. Slocum, Jr., Pennsylvania State University

Arch G. Woodside, University of South Carolina

[This research was sponsored by grants from the Gulf Oil Foundation, Mellon National Bank and Trust Company, and the Faculty Research Fund, Graduate School of Business Administration, The Pennsylvania State University.]

Perceived risk is a relatively new dimension in marketing. Bauer introduced the concept in 1960 by pointing out that consumers characteristically develop decision strategies and ways of reducing risk that enable them to act with relative confidence and ease in situations where their information is inadequate and the consequences of their actions may be drastic.

The perception of risk in a purchase situation is a function of the possible consequences and the uncertainty involved. Consequences reflect the amount at stake in the purchase situation and uncertainty represents the consumer's feeling of subjective probabilities that she will win or lose all or some of the amount at stake (Cox and Rich, 1964).

For the consumer to be in a quandary, one of two or more alternative courses of action must offer greater perceived risk and at the same time greater potential benefits in its selection. Otherwise, little problem exists for the consumer; she would select the less risky, more potentially rewarding alternative.

Individual buyers may not perceive the same amount of risk in the purchase of a given product. This perception may vary according to a number of factors, such as prior product experience, general self-confidence in buying, and self-involvement in buying (Robertson, 1970). Does the concept of perceived risk relate to individual differences in personality traits and shopping involvement enough to warrant the assumption that there is a more or less general factor of perceived risk? The present research is focused on this question using shopping orientation, consumer goods, and personality variable as dependent variables.


Shopping Involvement and Orientation

In an article by Stone (1954), he explicates three caricatures of shopping orientation. The apathetic oriented shopper is not interested in shopping and seeks to minimize her effort. The personalizing shopper seeks to individualize the consumer's role in the store and is concerned with maintaining a close relationship with store personnel. Consequently, these shoppers are not as concerned with criteria such as price or quality selection of merchandise as the "economic shopper." Stone indicates that attitudes towards shopping are pursuers of consumer behavior.

Based on Stone's description of shopper orientations, 18 questions using a modified Likert type scale were developed to measure shopping orientation (Table 1). A factor analysis program using principle component analysis and an orthogonal varimax rotation was performed. Three key factors were identified: personalizing, economic and apathetic orientations. The independent items used to identify shopper orientations are indicated in Table 1.

Typology of Consumer Goods

Data pertaining to which good(s) is acceptable to buy with credit according to social class and income have been reported by Slocum and Mathews (1970). Of the twenty consumer goods identified, the researchers attempted to categorize the goods into superordinate categories. The factors and cluster analysis program which was used to categorize consumer shopping orientation was employed. Following this procedure, three factors of goods were identified: clothing and small gifts, luxury goods, and travel and entertainment. A determinant of the correlation matrix indicated values ranging from .886 to .994. Thus, there is relatively little multicollinearity between the three types of consumer goods.

Jackson Personality Inventory

The Jackson Personality Inventory (1967) is designed to yield a set of scores for personality traits broadly relevant to the function of normal individuals. Of the total of 22 scales developed, factor analytic procedures and theoretical considerations by Jackson have suggested a convenience basis for organizing the categories into seven superordinate categories. Of the seven categories, the researchers chose category A, which measures impulsivity and readiness to accept change. The individual characteristics found within this category include impulsivity, change, order, and cognitive structure. The relationship between risk taking and these personality dimensions have been reported by Kogan and Wallach (1964), Scodel, et al. (1959), and Bergler (1957). However, little research has been conducted that attempted to integrate these personality dimensions with consumer risk-taking or risk-avoiding behavior (Brody and Cunningham, 1968, and Mathews and Slocum. 1970).

Perceived Risk Instrument

The perceived risk instrument tests the consumer's willingness to choose the riskier brand in two brand choice situations. There are four brand choice situations in the instrument for the following product categories: steam irons, woman's coats, electric food mixers, and cameras. The information provided in the situations was not sufficient to allow for explicit calculation of expected value.

The following example is taken from the test:

Mrs. Brown has decided she needs a new steam iron. She was thinking of purchasing an iron similar to the one she has used for the past 12 years. This iron has served her well and she especially likes its handling comfort. It is made by Company X and has a one-year guarantee. The price of Company X iron is $19.98. Recently, Mrs. Brown has seen a television commercial showing a different iron having a Teflon-coated soleplate. She especially likes the amount of steam this iron produces. It is made by Company Y and has a six-month guarantee (excluding Teflon coating). The Company Y iron is priced at $23.95.



Exhibit 1 presents a summary of the other test items in the instrument.



Housewives completing the test instrument picked one of six possible answers for each situation. The housewives are asked to choose the lowest probability of potential benefit acceptable before taking the riskier choice. The probabilities listed were 1, 3, 5, 7 and 9 chances in 10 of an excellent product, and a final category in which the respondent could refuse the more risky product no matter how certain that it was an excellent product. This final category was scored as 10. Low scores signify high willingness to choose to take the riskier alternative.

The total scores for respondents could range from 4 to 40 with 40 implying unwillingness to choose the riskier action under any circumstances.

Validity of the test was measured using a number of criteria. The instrument was compared with the Kogan-Wallach life dilemma test (1964) using 22 female students which yielded a Spearman rank correlation of .64 (p<.01). 79 housewives were divided into three age groups: under 35, 35-50 and over 50. A median test of risk scores produced a chisquare value of 7.89 (2d.f, p<.02). As age increased, willingness to take more risky consumer decisions decreased.

Test-retest Pearson product-moment coefficient was .75 for 18 subjects using a one week interval between administrations (Woodside, 1968).


Data were collected from personal interviews conducted by a market research house in a large eastern metropolitan area. The data were gathered as part of a larger study on consumer behavior currently being conducted by the researchers. The sample consumers were based on a design involving a random selection of 526 consumers actively involved in using a commercial bank credit card.


Table 2 presents the results of cross classifying the respondents by shopping orientations and willingness to take risk. The data were divided as close to the median as possible from the test instruments. Data were also divided into quartiles with analyses producing the same conclusions. Housewives scoring low in the perceived risk scale were more willing to take the riskier brand choice compared to those with high scores. The economic oriented shopper scored higher than expected on the perceived risk scale. In other words, the economic shopper was significantly less willing to choose the riskier brand when compared to those not economically oriented. The apathetic and personalizing oriented shoppers were not shown to be significantly related to willingness to take risk.

The data in Table 3 indicate the personality dimensions distinguishing between the risk taker and the risk avoider. Consumers willing to take high risks were more impulsive than consumers who were less willing to take risks. Jackson (1967) describes a highly impulsive individual as one who "tends to act on the spur of the moment without deliberation." Similarly, the data indicate that these consumers tend to score lower in their need for order and cognitive structure. That is, high risk takers make decisions based on incomplete information rather than definitive knowledge and without methodically organizing their decision matrix. Similar results have been reported by Brody and Cunningham (1968) and Kogan and Wallach (1964). Individuals who avoid making risky consumer decisions tend to describe themselves as liking orderly decisions based on a stable set of values. Thus, the effect of personality characteristics on matters of consumer risk decisions should not be overlooked. The study of selected personality dimensions is likely to provide insight into studying the consumer decision-making process in the area of perceived risk.

As Table 4 indicates, individuals who are risk avoiders report an unwillingness to use credit to purchase luxury goods and for travel and entertainment. Brody and Cunningham (1968) have found that individuals who score low on "perceived social risk," tend to purchase goods based on purchase convenience and relative price. That is, risk avoiders tend to make consumer decisions based upon more definitive knowledge of product usefulness. As previously noted in Table 9, this finding is consistent with an economic oriented shopper.








The perceived risk taker may be meaningfully differentiated from the risk avoider across a number of personality variables. Since willingness to take risk is an inherent factor in consumer decision making, the consumer's pattern of responses to risk taking may offer a satisfactory predictive variable for consumer actions. Heretofore, the majority of studies of personality factors affecting consumer behavior have produced negative and sometimes contradictory findings. The lack of meaningful relationship may be due to the use of standardized personality tests generally developed for measuring social or antisocial behavioral tendencies which are not closely related to purchase behavior. The significant relationship between attitude toward purchasing on credit and willingness to take risk supports the concept of perceived risk as a personality factor affecting consumer decision patterns.


Bauer, R. A. Consumer behavior as risk taking. Dynamic Marketing for a Changing World, R. S. Hancock, ed., Chicago, Illinois: American Marketing Association, 1960, 389-398.

Bergler, E. The psychology of gambling. New York: Hill and Wang, 1957.

Brody R. & Cunningham, S. Personality variables and the consumer decision process. Journal of Marketing Research, 5 (February, 1968), 50-58.

Cox, D. F. & Rich, S. U. Perceived risk and consumer decision making-the case of telephone shopping. Journal of Marketing Research, Vol. I (November, 1964)S 32-37.

Jackson, D. Personality research from manual. Goshen, N. Y.: Research Psychologists Press, Inc., 1967.

Kogan, N. & Wallach, M. Risk taking: a study in cognition and personality. New York: Holt, Rinehart, & Winston, 1964.

Mathews, H. L. & Slocum J. W. Jr. Social class and commercial bank credit card usage. Journal of Marketing, 33 (January, 1969), 71-79.

Mathews, H. L. & Slocum, J. W. Jr. Use of Psychographic variables to predict commercial bank credit card usage. Paper presented at the American Marketing Association, Boston, 1970.

Robertson, T. S. Consumer behavior. Scott, Foresman and Company, New York, 1970.

Scodel, A., Ratoosh, P. & Minas, J. Some personality correlates of decision-making under conditions of risk. Behavioral Science, 4 (January, 1959), 19-28.

Slocum, J. W. Jr. & Mathews, H. L. Social class and income as indicators of consumer credit behavior. Journal of Marketing, 34 (April, 1970), 69-74.

Stone, P. City shoppers and urban identification: observations on the social psychology of city life. American Journal of Sociology, 60 (July, 1954).

Tryon, R. & Bailey, D. The BC try computer system of cluster an factor analysis. Multivariate Behavioral Research, (January, 1966), 95-111.

Woodside, A. Group influence and consumer risk taking: an experimental study. Unpublished doctoral dissertation, The Pennsylvania State University, 1968.



H. Lee Mathews, Pennsylvania State University
John W. Slocum, Jr., Pennsylvania State University
Arch G. Woodside, University of South Carolina


SV - Proceedings of the Second Annual Conference of the Association for Consumer Research | 1971

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