Consumer Risk Perception and Addictive Consumption Behavior

Beginning of article

In economic analyses consumers are often assumed to be rational decision makers. They are expected to perform rationally when purchasing products; however, in reality, consumers' choices and actions often result in negative consequences relating to themselves as well as their society. Addictive consumption, compulsive consumption, and illegal activities are some examples of the less attractive side of consumer behavior. Numerous studies have confirmed the importance of less attractive consumer behavior in various aspects of consumer decision making (Elliott, Eccles, & Gournay 1996; Solomon 2007). The focus of this article is on consumers' addictive consumption decision-making.

Consumer addiction is a consumer's physiological or psychological dependency on certain products or services. Becker (1992) defines habitual behavior as displaying a positive relation between past and current consumption, as the time periods compared are not very close. In other words, a habit may grow into addiction when the effects of past consumption on present consumption are too strong to be destabilized. Becker further notes that addiction may possibly be a strong habit. This is taken as the definition of addiction. Becker divided habitual behavior into the following two categories: harmful habits and beneficial habits. If a habit is harmful, it indicates that present consumption lowers future utility. By contrast, if a habit is beneficial, it indicates that present consumption raises future utility. Typical examples of harmful habits include cigarette smoking, excessive drinking, and use of drugs (e.g., cocaine), since they can lead to illness and depression. Previous studies in this field have mostly focused on cigarette smoking, alcohol use, and drug use (Bukstein & Kaminer 1994; Harrison, Fulkerson, & Beebe, 1997; Lynskey & Hall 1998; Pollay et al., 1996; Viscusi, 1990, 1991; Warner, 1977); Internet addiction (Griffiths, 2000; Pratarelli & Browne, 2002); and shopping addiction (Elliott et al., 1996).

There are many factors that can affect a consumer's attitude toward addictive or habitual consumption. One of the factors of great concern is an individual's risk perception. The concept of risk in economics was originally proposed in 1920 (Knight, 1921). Bauer (1960) introduced the concept of perceived risk to marketing literature. As behavioral decision studies have shown, individuals have the ability to reliably incorporate risk perception into their purchasing decisions. Several studies along this line have found a relationship between an individual's risk assessment and the consumption of addictive products (e.g., Liu & Hsieh, 1995; Viscusi, 1985, 1990, 1991). However, there is one issue remaining: How do individuals form their risk perceptions? Do information sources have a direct influence on consumers' adoption intention or do they have only an indirect influence towards the product, through risk perception and attitude? Are information sources more likely to influence the consumer's risk perception when s/he is not addicted to the product as compared to when s/he is? This study was aimed at addressing these questions.

The empirical section of this study examines cigarette smoking. Cigarette smoking is a major public health challenge worldwide and has been recognized as a risky consumption activity. The linkage between risk perception and smoking behavior was found in the following statistics. In the 1950s, between 40% and 50% of Americans believed that cigarette smoking was a cause of lung cancer. By the 1980s, this figure had jumped to over 80% (Viscusi, 1991). As The Economist reported in an article entitled "Why do Europeans smoke more than Americans?" (April 2006): "Judging by lungs, Americans are fitter than Europeans. Only 19% of adult Americans smoke, compared to 34% of Germans and 27% of Britons". The gap between Americans and Europeans may be best explained not by prices or income levels, but by ignorance. Europeans are less likely than Americans to believe that smoking is harmful. Only 73% of Germans, for example, believe smoking is dangerous, as compared to 91% of Americans.

With the burden of cigarette smoking mortality being shifted from developed to developing countries, it is estimated that 70% of annual smoking-related deaths worldwide will occur in developing countries by 2030 (Gu, Wu, & Duan, 2004; Viscusi & Connor, 1984). Some newly industrialized countries, such as Singapore, South Korea, and Taiwan have prohibited smoking in public areas to prevent people from exposure to environmental tobacco smoke. According to a national survey in Taiwan in 2002, the prevalence of smoking among adults aged 18 and over is 28.8%, which is close to that of Americans in 1991 (28.3%). Furthermore, even with increased tax on tobacco, the smoking population continues to increase at a rate of 200,000 per year in Taiwan. Due to the lack of information as to what causes the increase in the smoking population, this issue needs to be investigated.

As discussed earlier, previous studies concerning smoking risk perceptions have not examined consumer addiction formation and consumption decision-making processes as causes of the perceptions. The researcher for the present study therefore focused on the causal relationships between information sources, risk perception, attitudes towards tobacco-related products, and smoking intention. In addition, the researcher tested the moderating effect of the degree of individual addiction between information sources and risk perception. The conceptual framework is depicted in Figure 1.

[FIGURE 1 OMITTED]

Based on the framework, the following hypotheses will be examined.

Risk Formation and Risk Perception

As suggested by Viscusi (1991), consumers form their risk perception based on three information sources: public information, prior beliefs, and individual experience. Public information consists of the statistical information about habitual consumption to which the individual has had access, including the number of warning labels seen on cigarette packets, number of years spent …