Can Individuals with Power Distance Consume Luxury? A Model for Inclusion Through Social Capital and Social Approval

Abstract

This study aims to determine to what extent social capital and social approval mediate the relationship between power distance and purchase intention of luxury brands when these brands are congruent with one’s self. Data were analyzed using structural equation modeling, linear regression to access mediating effects and latent class analysis to profile the sample. Results suggest that social capital and social approval together have a dual mediating effect on consumers’ intention to purchase luxury brands with a feeling of power distance. Three distinct perceived power distance profiles were revealed through respondent heterogeneity, impacting the other constructs. This is the first study to propose a model in the luxury market that includes low-status, underprivileged consumers as distant from power in society through the dual mechanisms of social approval and social capital. The study provides evidence that there is an opportunity to better understand including underprivileged individuals in the market and society.