Distributional effects of perceptional financial scarcity and abundance on food choices

Abstract

This article enriches the attribute-based choice literature in economics by providing compelling evidence that inducing perceptional financial scarcity and abundance affects consumer food choices. Our experiment shows that induced financial scarcity reduces the likelihood of purchasing high-quality low-calorie food items at a price premium. We also find that income is an important factor that moderates this effect. The low-income group demonstrates similar purchasing behaviors in the Scarcity and Abundance experimental conditions. However, the high-income group is more likely to respond to perceptional financial changes.