U. researchers find that proximity to payday changes consumer conduct, motives

SALT LAKE CITY — People who have just gotten paid are more likely to buy services or products that improve their lives.

However, as time elapses from payday, consumers' behavior changes, and they make purchases to preserve their standard of living, according to a new study.

How close or far away someone is from a paycheck greatly influences the individual's spending habits and responses to messages to buy, according to the study released by two University of Utah researchers that is featured in the September issue of the Journal of Marketing.

The study indicates it is not the size of the paycheck received, but the time that has gone by since the last paycheck, that can sway consumer conduct. The proximity to payday makes consumers more aware of how much they have in the bank and how much products or services cost.

"Our findings are surprising, because previous research has always considered preferences to be relatively stable, not changing much over time," said Himanshu Mishra, one of the two U. researchers. "We find that not only do preferences change during such a short duration — paycheck to paycheck — but also that they fluctuate between a promotion- and a prevention-focus."

A "promotion-focused" product or service is one that involves buying something that makes life better, while a product or service that is "prevention-focused" preserves the current standard of living.

"As time goes by and your paycheck is almost spent, you want to maintain your status quo," Mishra said.

The results of this study could influence advertisers and employers, as well as consumers.

For example, Mishra said, companies launching products might be smart to do so earlier in the month, when consumers are more likely to just have gotten paid and are open to new ideas.

He suggests that products with promotion-focused characteristics (tooth-whitening toothpaste, for example) might be advertised more heavily during different times of the month than prevention-focused products (cavity-fighting toothpaste).

Employers also might time their various corporate drives with an eye toward when paychecks are issued.

Mishra suggested a company-wide exercise program probably would pull in more participants if it were closer to payday, because it is promotion-focused: It helps people improve their lifestyle. But a healthy eating program probably would be more successful if it were launched farther away from payday, since it is prevention-focused, with its emphasis on avoiding certain types of foods to maintain a lifestyle.

Mishra and his co-researcher, Arul Mishra, got the idea for the study from their personal experiences in graduate school. Both are assistant professors in the Department of Marketing at the U.'s David Eccles School of Business. They co-authored the article in Journal of Marketing with Dhananjay Nayakankuppam of the University of Iowa.

The researchers found that, although study participants ranged in age from 21 to 45, age made no difference in consumer conduct. Whether participants had any children in the household did not have an effect, either.

Himanshu Mishra suggested that during these difficult economic times, with increasingly larger numbers of people living paycheck to paycheck, the trends the study unearthed could become even more noticeable.

e-mail: lindat@desnews.com