Consumer Risk Perception and Addictive Consumption Behavior

Article excerpt

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. …