License to splurge.

News from Ravi Dhar of Yale and Uzma Khan of Carnegie Mellon University which will be published in an upcoming issue of the Journal of Marketing Research. I think the focus of their research is to figure out HOW to get people to buy expensive stuff.

From Yale School of Management "Center for Customer Insights:"
License to Shop: Charitable Acts Increase Consumers’ Willingness to Buy Luxury Goods
... the "licensing effect" illustrates that engaging in — or merely expressing a preference for — a virtuous behavior creates a positive self-concept that acts as a license to purchase a luxury or a more indulgent product.

The boost in self-concept helps offset the pang of guilt and negative self-attributions consumers often feel when buying expensive or frivolous items. It becomes easier to justify the purchase of a luxury good after the performance of a charitable act.

From the Yale Alumni magazine:
Good news for Rolex?
In one experiment, they asked participants to select a charity organization for which they would willingly volunteer three hours per week. Later, they asked the same people, plus another group of subjects, to choose between buying a pair of designer jeans or a vacuum cleaner, assuming that they had been planning to buy both but could only afford one. Contemplating community service made people twice as likely to choose the jeans.

... simply thinking about acting altruistically seems to be enough to justify a splurge. "Just saying, I'm the kind of person who volunteers,' is almost as good as [actually spending] six hours serving food in a soup kitchen," Dhar explains.

Yet there's a downside to feeling altruistic: it may decrease the likelihood of subsequent good deeds. At the conclusion of one experiment, participants were given a chance to contribute some of their nominal fee to charity. Those who had already contemplated a hypothetical charitable act proved significantly less generous when the real thing came up.

Technorati Tags: Research, Marketing, Altruism, Hedonism, Irony