THE EFFECT OF MONEY ATTITUDE AND COMPULSIVE BUYING BEHAVIOUR

AMONG YOUNG WORKING ADULTS

1.1 INTRODUCTION

Money changes everything. Money affects career and relationship choices as well as mater of
control,safety,self esteem, and also well being. Majority of decision made and people personality
is developed by what people believe about money. Money is not about numbers but involve
feelings, it is about the way we feel about it. Engelberg and Sjoberg (2006)felt that money is
huge emotional, phychological and symbolic unit to people. People bring their own meanings,
emotion and experiences on their relationship with money.

Money attitude influence people lives in nearly all aspects such as relationship, health,
spending attitude, and career. One’s cultural background influence the symbolic meaning of
money,(Tang 1993).Money attitudes are always developed through one’s surrounding
background. Parental Income, parenting practices, education, social class ,beliefs and money
habits all influeces one’s money attitude(Tang and Gilbert 1995). One the other hand,mass media
has influences on money attitude as well. Money attitude are created since our childhood and
well remain almost consistent throughout our life(Tang and Gilbert 1993).

Beyond money attitudes, compulsive buying are also likely to play a pivotal role in affecting
other psychological tendencies among consumers. All marketers and businesses would be happy
with high and continued purchases from consumers. Some consumers may however
uncontrollably and excessively purchase to a point where they become compulsive buyers.
Compulsive buying is viewed as a dysfunctional behavior (Dittmar, 2005. Sociopsychological
and demographic factors are reported to be some of the drivers of compulsive buying in
developed and developing countries (Deon, 2011; Dittmar, 2005). Compulsive buying is also a
growing problem among young consumers, such as Generation Y (Gen Y) (Dittmar, 2005)
 CHAPTER 2

Power prestige dimension

Based on Yamauchi and Temple’s (1982,p.532) money attitude scale, individuals scoring high
on the power prestige dimension hold ‘…attitudes that indicate the importance of status seeking,
competition, external recognition and acquisition’ Individuals use money as a status symbol to
influence and impress others and to give them ability to remove obstacles that obstruct their path
in achieving goals.In other words, symbolizes a command over goods and services that are
compulsory to advance the self-interest of an individual in a free enterprise economy (Roberts
and Jones,2001)

According to Roberts and Jones (2001), the power prestige dimension of money attitude can
also be supported by the social comparison theory which suggests that individuals tends to
compete and compare with each other. In today’s society status is regarded through the
ownership of status products rather than through personal, occupational, or family reputation.
Thus in their effort to come out best in this social power by displaying their wealth through the
abilty to purchase goods and services (material objects).This is because wealth has been regarded
as the best indicator of a person’s power and status in this modern society (Roberts and
Jones,2001)

This confirms Robert and Jones(2001)assertion that compulsive buyers are more likely to
correlate buying with social status. In addition, Tang and Luna-Arocas (1997)stressed how
completion creates pressure on individuals perform in a corporation as well as in social arena to
acquire more material objects in their quest to prove their social status i.e. through consumption.
Consequently, this continuous drive to compete and acquire prestigious goods and services may
lead to compulsive buying. Schor (1998) supports the notion of self-desired image when she
pointed out that individuals use commodities as a mean of signaling to the outer world who they
want to be, and that consumption is an act of comparison.
Retention-time

The retention-time dimension of the money attitude scale describes individuals scoring high on
this dimension as having high self-esteem. They also place a great value on the process of
preparation to carefully plan and closely monitor their financial future (Roberts and Sepulveda,
1999; Yamauchi and Templer’s 1982). In contrast, individuals with low scores are low on self-
esteem and tend to be very present oriented rather than future oriented. Consequently, there is
little concern for the careful management of their funds. For example, some findings such as
Hayhoe et al. (1999) revealed that students holding more credit cards tend to score lower on
retention-time dimension. Tokunga (1993) found that a close correlate of compulsive buying in
the form of unsuccessful credit users took fewer steps to retain their money. This may partially
confirm Hanley and Wilhelm’s (1992) findings that compulsive buyers also score lower on the
retention-time dimension. Tang and Gilbert (1995) also found an inverse relationship between
careful budgeting and compulsive spending. Thus, it can be hypothesized that:

Distrust

In terms of money attitudes, the second type of consumer is those who show hesitation, distrust,
and suspiciousness when dealing with money. Such consumers are likely to have limited skills in
making sound purchases. These consumers are typically price sensitive. They do not have the
ability to make efficient purchases, and are unlikely to be compulsive buyers. Consumers who
show lack of trust in dealing with money are rated highly on the distrust dimension of MAS.
Such individuals tend to be insecure and wary of their ability to maximize the value of their
money through efficient purchase(Yamauchi and Templer (1982).

Roberts and Jones (2001) suggested that this dimension should be regarded as price sensitivity
because the items focus on consumer’s sensitivity to the price paid for goods and services. In
addition, they believe that individuals who obsess over the price paid for goods and services are
less likely to engage in compulsive buying. Women expressed less confidence in their financial
dealing (Frugality-Distrust and Anxiety) and more security minded in money handling
(Planning-Saving) than men (Prince, 1991.Based upon the above this study hypothesizes:
Anxiety

The third type of consumer represents those who view money as a source of anxiety. These
consumers engage in compulsive buying to alleviate expeditiously their anxiety. Escape from
anxiety is the primary motivator for consumers who exhibit addictive buying behavior. The
anxiety dimension of the money attitude scale describes a person scoring high in this dimension
to be very worried and anxious about money and views money as a source of protection from
anxiety (Roberts and Jones, 2001; Lim and Teo, 1997; Yamauchi and Templer, 1982).

Lim and Teo (1997) suggest that individuals who have experienced hardship will tend to
experience more financial anxiety. However, their research did not indicate any significant
differences in the tendency of such individuals to save and reduce spending. Roberts and Jones
(2001) clarified that compulsive buying is viewed as a resolution to anxiety and that compulsive
buyers react to stress with higher levels of anxiety than do non-compulsive buyers. This could
indicate that though consumers may experience financial anxiety, they still tend to spend
indiscriminately.

Hirschman’s (1980) theory of experiential consumerism states that sensory and imaginary
processes may motivate shopping as a means of maintaining high state of arousal and
individuality. Furthermore, Valence et al. (1988) described that anxiety provokes spontaneous
action and pushes the consumer to reduce tension, which leads to excessive consumption i.e.
compulsive buying. Thus, one can assume that the prime motivation for buyers to engage in
compulsive buying behavior is to escape from anxiety, to relieve stress, and to make them feel
happy, a notion supported by Roberts and Jones’ (2001) study.

Unfortunately, these attempts to escape from problems tend to be temporary and will most likely
result in even higher level of anxiety and guilt over the money spent earlier (Desarbo and
Edwards, 1996). Therefore, this study hypothesis that:
 Operational Definition

Money attitudes

The symbolic and psychological values of money are far exceeding its relative economic value,
as common associations with power, prestige, security, status, achievement, anxiety, distrust,
love, and freedom illustrate (Furnham and Okamura, 1999). Research on money attitudes is
limited in the marketing discipline (Durvasula and Lysonski, 2010) even though it can
potentially influence a wide variety of consumer behavior (Rose and Orr, 2007). Bonsu (2008)
suspect that outcomes of consumer behavior like credit card abuse, compulsive buying,
consumer debt accumulation and bankruptcy may emanate from high scorers of certain money
attitude dimensions.

On examining the relationships between dimensions of money attitudes and compulsive buying,
researchers (e.g., Roberts & Jones, 2001; Li et al., 2009) have mainly used Yamauchi and
Templer (1982) money attitudes scale. Money attitudes have impacted all areas of a person’s life
which include saving habits, spending, workplace performance, political ideology, charitable
giving, and attitude towards the environment.

Compulsive buyers are found to possess relatively lower self-esteem and self-doubt than
‘normal’ consumers, and perceive beliefs that money can reflect the symbolic ability to enhance
self-esteem (Chang and Arkin, 2002; Hanley and Wilhelm, 1992). Those who were more likely
to use money for power or status, such as buying a certain car because it is “higher class” would
be likely to buy on impulse than those who were not (Lai, 2010). Attitudes toward possession
and spending such as compulsive spending and materialism, were found to be important
indicators of debt (Norvilitis et al., 2006). Norvilitis, Szablicki, and Wilson (2003) found
contradictory information from Norvilitis et al. (2006) which showed no relationship between
attitudes towards money and behavior .
There are Five dimension in money attitude (Yamauchi and Templer (1982):

Power-Prestige: This factor implied that money can be used as the power to influence and
impress others

Retention-Time: This factor focused on financial planning for future and careful use of money

Distrust: This factor show hesitant, suspicious, and doubtful attitudes with respect to money.

Quality: This factor focus on the buying of quality, name brand products

Anxiety: This factor have difficulty making spending decisions and feel that money saved is
never enough.

YOUNG WORKING ADULTS

Young working adults are defined as people between 21-25 years age. They are entering into the
workforce and also they need to protect their income potential from the uncertainties’ of life.
During this stage of life many young working adults will find themselves facing some instability
in “in between “period of their lives(Kohn, Michael R.2013) .We posit that this term is linked to
attitudes towards money .
Problem statement

The money attitude

1.2 Objectives of the Study

 To identify the factors effecting the money attitude among working adult.
 To determine the relationship between Power- prestige, retention time, distrust, anxiety
and compulsive buying.
 To determine which money attitude has the greatest influence on buying behavior.

Research Question

RQ1 Has the money attitude amoung young working adults affected the compulsive buying
behavior?

RQ2 What are the factors effecting the money attitude amoung young working adults?

RQ3 Which money attitude has the greatest influences on buying behavior?

Hypothesis
RE1. The relationship between power-prestige dimension of money attitude and compulsive
buying behavior for young working adults

RE2. The relationship between the anxiety dimension of money attitude and compulsive buying
behavior for young working adults

RE3. The relationship between the distrust dimension of money attitude and compulsive buying
behavior for young working adults

RE4. The relationship between the time retention dimension of money attitude and compulsive
buying behavior for young working adults
1.3 Scope of the study

 The study focuses on the relationship between money attitude (power prestige, retention
time, distrust, anxiety) and compulsive buying behavior among young working adults in
Port Dickson

1.4 Limitation of the study

 The sample selection for present study is limited to working adults in Port Dickson
 Description of limitation should be state in future tense because the research is discover
before complete.

1.5 Significance of the study

To understanding how individual make decision to spend their available resources like time,
money, and effort while purchasing goods.

To overcome the financial problem among young working adult

CONTENTS Page

DECLARATION

CERTIFICATION

ACKNOWLEDGEMENT

ABSTRACT

LIST OF CONTENTS

CHAPTER 1 INTRODUCTION

1.1. Introduction
1.2. Problem Statement
1.3. Objectives of Study
1.4. Research Question
1.5. Hypothesis
1.6. Scope of Study
1.7. Limitations of Study
1.8. Significance of Study
1.9. Money Attitudes
1.10. Compulsive Buying
1.11. Young Working Adults
1.12. Conceptual Framework
1.13. Gun Chart

CHAPTER 2 LITERATURE REVIEW

2.1. Relationship between power-prestige and compulsive buying behavior
2.2. Relationship between time- rentention and compulsive buying behavior
2.3. Relationship between anxiety and compulsive buying behavior
2.4. Relationship between distrust and compulsive buying behavior

CHAPTER 3 METHODOLOGY
3.1. Introduction
3.2. Data collection
3.3. Measurement Instrument
3.4. Analysis data

Appendix A
Appendix B
References
The Proposed Conceptual Framework

To study the effect of money attitude and compulsive buying behavior, a framework is
constructed based on the previous studies.The proposed framework consists of two
components;the concepts of money attitude and the effect of money attitude towards compulsive
buying.

INDEPENDENT VARIABLES DEPENDENT VARIABLE

MONEY ATTITUDE

Power-
Prestige
Retention-
time Compulsive
Buying
Anxiety

Distrust

Figure 1: The proposed Model Framework to identify the Effect of Money Attitude toward
Compulsive Buying Tendencies

In this study, compulsive buying is proposed to be a function of money attitude (power-

prestige ,retention-time , anxiety and distrust) for this study.in other words, compulsive buying is
dependent variable while money attitude (power-prestige ,retention-time, anxiety and distrust)
are antecedents of compulsive buying.
CHAPTER 2:RESEARCH METHODOLOGY

3.1 Introduction

This research is to determine the relationship between money attitudes and compulsive buying
among young working adults in Port Dickson. The questionnaire will be dispensed to
approximately 360participants at a major shopping complex in the Regina Mall, Port Dickson.
Each questionnaire took around 10minutes to complete.

Data collection

Data will collected via a mall intercept at a major shopping complex in the Regina Mall, Port
Dickson. Shoppers approached to participate in a self-administered questionnaire which takes
about 10 minutes to complete. Participants were required to be at least 20-25 years old and must
be a young working adult to participate. Every individuals that crossed a designated spot outside
the main entrance of the mall was approached to participate. Only individuals between the ages
of 20-25 were requested to continue with the survey. Prior to the data collection, researchers
train and instruct on how to administer the survey instrument and to include respondents with
different demographic profiles. The data collection conduct over a two week period on both
weekdays and weekends.

Measurement Instrument

The instrument comprised of 4 sections. The first section began with a screening question. The
second section comprised of a modified version of Yamauchi and Templer’s (1982) twenty-two
items money attitude scale (MAS) used to measure respondent money attitudes. Responses to all
items were based on a 5-point Likert scale, which range from ‘Always’ to ‘Never’. Power-
Prestige money attitude is the use of money for power or status. Someone who has a Retention-
Time money attitude thinks that it is important to save money to be financially stable and create
a stable futureBesides someone who has a the anxiety dimension of the money attitude scale
describes a person scoring high in this dimension to be very worried and anxious about money
and views money as a source of protection from anxiety. People scoring high on this factor have
difficulty making spending decisions and feel that money saved is never enough. The last
dimension contained six items and was labeled Distrust. High scoring people on this factor show
hesitant, suspicious, and doubtful attitudes with respect to money.

The third section consist of the clinical screener developed by Faber and O’Guinn (1992) used
to identify compulsive buyers. The 5-point Likert scales asked respondents to indicate their
agreement with the statements present as well as the frequency of experiencing a behaviour on a
5point scale ranging from ‘Always’ to ‘Never’. High scores indicated compulsive buying.

The format of a typical five-level Likert item is:

1. Never

2. Sometimes

3. Often

4. Very Often

5. Always
Appendix A:

SECTION A

Items of the screening question

1. Gender
2. Age Group
3. Purchase Frequency

SECTION B

Items of the Power prestige (Yamauchi and Templer, 1982)

1. I behave as if money were the ultimate symbols of success.

2. In all honesty, I own things in order to impress others.
3. I use money to influence individuals to do things for me.
4. Individuals tell me I place too much emphasis on the amount of money a person has as a
sign of success.
5. Although I should judge the success of individuals by their deeds, I am more influenced
by the amount of money they have.
6. I must admit that I purchase things because I know they will impress others.
7. I seem to find that I show more respect for individuals with more money than I have.

5 point Likert Scale: 1- Always, 5- Never

Items of the Retention-Time (Yamauchi and Templer, 1982)

1. I follow a careful financial budget.

2. I save to prepare for my old age.
3. I put money aside on a regular basis for the future.
4. I do financial planning for the future.
5. I keep track of my money.
6. I have money available in the event of another economic depression.

5 point Likert Scale: 1- Always, 5- Never

Items of the Anxiety (Yamauchi and Templer, 1982)

1. I worry I will not be financially secure

2. I show signs of nervousness when I don't have enough money
3. I show worrisome behaviour when it comes to money.

5 point Likert Scale: 1- Always,

5- Never

Items of the Distrust (Yamauchi and Templer, 1982)

1. I argue and complain about the cost of things I buy

2. I hesitate to spend money even on necessities
3. I automatically say ' I can't afford it ", whether I can or not
4. When I buy something, I have a suspicion that I have been taken advantage of
5. After buying something, I wonder if I could have gotten the same for less elsewhere
6. When I buy things I complain about the price I paid
5 point Likert Scale: 1- Always, 5- Never

SECTION C
Items of the Compulsive Buying Scale (Faber and O’Guinn, 1992)

1. If I have any money let at the end of the pay period, I just have to spend it
2. Felt others would be horrified if they knew of my spending habits
3. Bought things even though I couldn't afford them
4. Wrote a check when I knew I didn't have enough money in the bank to cover it
5. Bought myself something in order to make myself feel better
6. Felt anxious or nervous on days I didn't go shopping
7. Made only the minimum payments on my credit cards

5 point Likert Scale: 1- Always, 5- Never

NO ITEMS

I behave as if money were the ultimate symbols of success

In all honesty, I own things in order to impress others.

I use money to influence individuals to do things for me.

Individuals tell me I place too much emphasis on the

amount of money a person has as a sign of success.
Although I should judge the success of individuals by their
deeds, I am more influenced by the amount of money they
have.
I must admit that I purchase things because I know they
will impress others.
I seem to find that I show more respect for individuals with
more money than I have