Being alone or together: How financially constrained individuals restore their self-esteem through consumption decisions

Individuals frequently face financial constraints, which can significantly influence their cognitive and consumption decisions. Prior research has mainly investigated how financial constraints influence personal consumption decisions about buying alone and using alone (i.e., solo consumption), but less on consumption decisions with others about buying together and using together (i.e., joint consumption). This research addresses this gap by examining the effect of financial constraints on consumption decisions (joint consumption vs. solo consumption). Across three formal and three supplemental studies ( N = 2186), we found that financial constraints significantly increased individuals’ preferences for joint consumption over solo consumption, with this effect being mediated by self-esteem. Furthermore, perceived economic mobility moderates the effect of financial constraints on preferences for consumption decisions (joint consumption vs. solo consumption). Specifically, for individuals with low perceived economic mobility, financial constraints lead to a preference for joint consumption (vs. solo consumption), whereas for individuals with high perceived economic mobility, financial constraints lead to a preference for solo consumption (vs. joint consumption). Our findings extend research on financial constraints, self-esteem, and consumption decisions.