Do Lower-Income Consumers Have a More Restricted Shopping Scope?

Abstract

INCREASED attention is being given to analyzing the shopping behavior of lower-income consumers.' Two contrasting propositions have been advanced regarding the nature of this behavior. first-the restricted approach-maintains that the shopping horizons of lower-income consumers are limited. They tend to shop near home and to know less about the market.2 second proposition can be labeled the approach. It leads one to expect lower-income consumers to have a wider scope of shopping. This view maintains that the lower the marginal opportunity cost of time for a group of consumers and the higher the importance of the potential savings to be realized from additional search, the more shopping these consumers will conduct.3 Higher-income consumers are more likely to have a higher marginal opportunity cost for time; thus their shopping time is more valuable than that of lower-income consumers.4 In addition, the savings to be realized from additional search are likely to be of more importance in the case of lower-income consumers. Therefore, according to this approach, lowerincome consumers can be expected to invest more effort in their shopping, to know more about the market, and to have a wider shopping scope. Although these two propositions underlie much of the discussion about the shopping behavior of lower-income consumers, the empirical evidence supporting either one of them is inconclusive. For example, while a number of studies have found lower-income consumers to have a limited geographic scope and to tend to shop near home,5 1. See, for example, the following recent book-form contributions: Frederick D. Sturdivant, ed., Ghetto Market Place (New York: Free Press, 1969); Alan R. Andreasen, ed., Improving Inner-City Marketing (Chicago: American Marketing Assn., 1972); and Donald Sexton, Groceries in the Ghetto (Lexington, Mass.: Lexington Books, 1973). 2. See Pierre Martineau, Social Classes and Spending JOURNAL OF MARKETING, Vol. 23 (October 1958), pp. 121-130; and David Caplovitz, Poor Pay More: Practices of Low-Income Families (New York: Free Press, 1967). Reviews of relevant literature are provided in: James F. Engel et al., Behavior, 2nd ed. (New York: Holt, Rinehart & Winston, 1973), especially pp. 143-159; Frederick D. Sturdivant, Subculture Theory: Poverty Minorities, and in Behavior: Theoretical Sources, Scott Ward and Thomas S. Robertson, eds. (Englewood Cliffs, N.J.: Prentice-Hall, 1973), pp. 469520; and Marcus Alexis et al., Consumer Behavior of Prisoners: Case of the Inner-City Shopper, in Improving Inner-City Marketing, Alan R. Andreasen, ed. (Chicago: American Marketing Assn., 1972), pp. 25-59. 3. See George Stigler, The Economics of Information, Journal of Political Economy, Vol. 69 (June 1961), pp. 213225; R. J. Van Handel, Uncertainty and Retail Location Patterns, Applied Economics, Vol. 12 (1970), pp. 289-298; and Garry S. Becker, A Theory of the Allocation of Time, Economic Journal, Vol. 75 (September 1965), pp. 493-517. 4. See, for example, Hans R. Isakson and Alex R. Maurizi, The Economics of Unit Pricing, Journal of Marketing Research, Vol. 10 (August 1973), pp. 277-285; Stuart U. Rich and Subhash C. Jain, Social Class and Life Cycle as Predictors of Shopping Journal of Marketing Research, Vol. 5 (February 1968), p. 45; and Howard Kunreuther, Why the Poor Pay More for Food: Theoretical and Empirical Evidence, Journal of Business, Vol. 46 (July 1973), p. 379. 5. See, for example, Caplovitz, same reference as footnote 1, Chap. 4; Frederick D. Sturdivant, Business and the Mexican-American Community, California Management Review, Vol. 11 (Spring 1969), pp. 73-80; and Kunreuther, same reference as footnote 4. Journal of Marketing, Vol. 40 (January 1976), pp. 46-54.