Future Anxiety and Consumer Behavior

ABSTRACT

Though economists have often pointed out the correlation between psychological anxiety and consumption, the amount of empirical study on the subject is scant. In the report, "Future Anxieties and Consumer Behavior (Nagashima, 2003)," the results of a survey given to 1,000 consumers were used to categorize the contents of anxiety and search for their correlations to consumption. The report concluded that 'there was not necessarily a direct correlation between anxiety and consumption." The following report, however, attempts to gain a further structural understanding of anxiety, and analyze, based on this understanding, the following two questions: What kind of anxiety influences what kind of consumption? And in what kind of consumer is that influence most pronounced?

The conclusions are as follows:

A systematic understanding of the different types of anxiety is possible if, instead of thinking about them in isolation, one focuses instead on the mutual relations between them. By using type-III quantification to quantify the presence of five types of anxiety, it is possible to educe a two-dimensional graph where axis 1 represents health and pension related anxiety and axis 2 represents wage and employment related anxiety. The degree of axis 1 anxiety was higher in the middle aged and elderly age group, while the degree of axis 2 anxiety was higher in the young age group.

The link between "psychological anxiety" and "consumption contraint" is remarkably visible in the selective consumption of the young age group. This relation, however, is not detected in the middle aged and elderly age group. It was found, moreover, that amongst the different anxieties, the equivalents of axis 2 anxiety - wage and employment related anxiety - play the leading role in directly affecting consumption.

Aside from the direct effects, anxiety can also influence consumption indirectly through its influence on consumption parameters and policy evaluations. It diminishes, for example, the effect of accelerated consumption that accompanies the expectation of inflation and tends to darken evaluations of economic policy. Indirect effects can, again, be prominently seen in the young age group, while it cannot be perceived in the middle aged and elderly age group. Unlike direct effects, however, it was understood that axis 1 anxieties - health and pension related anxieties - play the leading role in the indirect effects of anxiety upon consumption.