How Money and Time Scarcity Influence Gift-Giving Behavior
Photo by Rob Laughter, Unsplash
Imagine receiving a Chipotle dinner from a friend after you express financial troubles. How would you feel?
According to a 2020 study, you would not respond well to this gift. But why?
To answer that, we explore a 2020 study by Alice Lee-Yoon of the University of California, Grant E. Donnelly of Ohio State University, and Ashley V. Whillans of Harvard Business School, which focuses on time and money scarcity as motives for gift-giving and how it impacts consumer behavior.
Methodology: Gift Giving
Study 1: Recalled Gifts and Recipient Experience. Study 1 explored how gift-giving impacts emotional experience and status perception with 405 participants. The participants…
Were assigned to a time or money scarcity condition. In the time scarcity condition, they were to imagine a gift they received where they felt the intention of the gift-giver was to save them time. The money scarcity condition had the same prompt, but with money;
Wrote a few sentences about their experiences; and
Asked about their impressions of the gift and giver.
Results showed that gift recipients had more negative emotions. When the gift giver’s intention was to save them money, they perceived that the gift giver had a lower status than them in society.
Study 2: Recipient Experience in Real-Life Gift Giving. The 200 participants in this study were not voluntarily involved in the experiment in order to focus on how real-life gift-giving motives changed someone’s gift-receiving experience. Here’s a summary of study 2:
Participants gave a $5 Starbucks gift card to a friend;
Their friend was told the gift’s intention was to either save them time or money;
Gift recipients were asked to respond to the gift through a survey; and
Gift-givers were asked whether they anticipated a negative response from the gift receivers.
Results showed the same results as study 1 in terms of emotional response and perceived lower societal position. Gift givers were also unable to accurately predict the emotions of the gift receiver.
Study 3: Moderating Role of Personal Resource Scarcity. This study focused on the scarcity levels of the gift recipient and their responses toward the gift. Here’s a scenario of how the study went for 405 individuals:
Imagine receiving a Chipotle dinner from a friend after expressing your financial troubles. How would you feel? Please share your personal level of scarcity.
Note that half, however, were asked to imagine having time troubles rather than financial.
Results found that responses and differences in status were heightened if the individual was experiencing high levels of scarcity. But this effect wasn’t found with time scarcity.
Study 4: Manipulating Scarcity. This study examined how the gift recipient’s emotional response and the perceived difference in status were impacted. The 501 participants:
Were assigned participants to either a time-saving or money-saving gift with either scarcity manipulation, no scarcity manipulation, or a control condition;
Wrote about their personal experience with time or money scarcity (if part of the scarcity manipulation condition);
Read the same Chipotle example from study 3; and
Imagined what their friend’s perception of their status is and whether the gift is helpful to their scarcity status (if in the no scarcity condition).
Note that the control group didn’t receive information about why their friend was giving them a free dinner.
Results displayed a lower level of appreciation for money-motivated gifts compared to time-motivated gifts. In addition, the money-motivated gifts were perceived as less helpful in relieving the individual’s scarcity troubles.
Study 5: Perceived Status and Purchasing Decisions. An exercise was given to 303 participants to focus on perceived status and purchasing decisions. They were asked to imagine:
Receiving a $30 Amazon gift card from a friend because they knew you were stressed with money; and
Picking a sweatshirt either from Boston or Harvard University to buy using this Amazon gift card.
Note that aside from financial stress, some participants were given no reason for the gift or said they knew you had inadequate amounts of money. Also, the researchers used the sweatshirt scale because participants reported that Harvard represented a higher social status than Boston University.
Thereafter, they were asked, why do you think your friend gave you this gift?
Participants without a reason were less likely to purchase the Harvard sweater, experienced less negative emotions, did not suspect any intention of the gift-giver, and perceived less difference in status.
The Results and Implications of Gift Giving and Lack of Resources on Consumer Behavior
Many people would think that friends struggling with a lack of resources are more likely to accept the gift and be happy about it. These results suggest otherwise.
Overall, the researchers found higher negative emotions and responses when the motive was money. The money scarcity motive also led to a larger perceived difference in status. All of these effects were especially heightened if participants were experiencing financial scarcity.
Even gift-giving motives impact consumer behavior. But now you know the simplest rule: if you’re motivated to buy a friend a gift, there’s no need to explain why you’re giving it to them in the first place!
Your Pop Neuro Consumer Behavior Insights:
Responses to receiving a gift change depending on the gift giver’s motive
When your reason for gift-giving is due to the gift receiver’s lack of money, they may feel negatively and perceive themselves to be of lower status than if there was a time constraint or no motive
If the gift receiver suffers from a lack of a resource, they’re more likely to present negative responses
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