Serena F. Hagerty - Publications

Journal Publications

Hagerty, S. F., & Barasz, K. (2020). Inequality in socially permissible consumption. Proceedings of the National Academy of Sciences, 117(25), 14084-14093.

Lower-income individuals are frequently criticized for their consumption decisions; this research examines why. Eleven preregistered studies document systematic differences in permissible consumption—interpersonal judgments about what is acceptable (or not) for others to consume—such that lower-income individuals’ decisions are subject to more negative and restrictive evaluations. Indeed, the same consumption decisions may be deemed less permissible for a lower-income individual than for an individual with higher or unknown income (Studies 1A and 1B), even when purchased with windfall funds. This gap persists among participants from a large, nationally representative sample (Study 2) and when testing a broad array of “everyday” consumption items (Study 3). Additional studies investigate why: The same items are often perceived as less necessary for lower- (versus higher-) income individuals (Studies 4 and 5). Combining both permissibility and perceived necessity, additional studies (Studies 6 and 7) demonstrate a causal link between the two constructs: A purchase decision will be deemed permissible (or not) to the extent that it is perceived as necessary (or not). However, because—for lower-income individuals—fewer items are perceived as necessary, fewer are therefore socially permissible to consume. This finding not only exposes a fraught double standard, but also portends consequential behavioral implications: People prefer to allocate strictly “necessary” items to lower-income recipients (Study 8), even if such items are objectively and subjectively less valuable (Studies 9A and 9B), which may result in an imbalanced and inefficient provision of resources to the poor.

Press coverage:

Forbes, What Is An 'Essential' Purchase For A Low-Income Family?

Barasz, K., & Hagerty, S. F. (2021). Hoping for the worst? A paradoxical preference for bad news. Journal of Consumer Research, 48(2), 270-288.

Nine studies investigate when and why people may paradoxically prefer bad news—e.g., hoping for an objectively worse injury or a higher-risk diagnosis over explicitly better alternatives. Using a combination of field surveys and randomized experiments, the research demonstrates that people may hope for relatively worse (versus better) news in an effort to preemptively avoid subjectively difficult decisions (Studies 1–2). This is because when worse news avoids a choice (Study 3A)—e.g., by “forcing one’s hand” or creating one dominant option that circumvents a fraught decision (Study 3B)—it can relieve the decision-maker’s experience of personal responsibility (Study 3C). However, because not all decisions warrant avoidance, not all decisions will elicit a preference for worse news; fewer people hope for worse news when facing subjectively easier (versus harder) choices (Studies 4A–B). Finally, this preference for worse news is not without consequence and may create perverse incentives for decision-makers, such as the tendency to forgo opportunities for improvement (Studies 5A–B). The work contributes to the literature on decision avoidance and elucidates another strategy people use to circumvent difficult decisions: a propensity to hope for the worst.

Press coverage:

Forbes, Tell Me What To Do: When Bad News Is A Big Relief

Collins, H. K., Hagerty, S. F., Quoidbach, J., Norton, M. I., & Brooks, A. W. (2022). Relational diversity in social portfolios predicts well-being. Proceedings of the National Academy of Sciences, 119(43), e2120668119.

We document a link between the relational diversity of one’s social portfolio—the richness and evenness of relationship types across one’s social interactions—and well-being. Across four distinct samples, respondents from the United States who completed a preregistered survey (n = 578), respondents to the American Time Use Survey (n = 19,197), respondents to the World Health Organization’s Study on Global Aging and Adult Health (n = 10,447), and users of a French mobile application (n = 21,644), specification curve analyses show that the positive relationship between social portfolio diversity and well-being is robust across different metrics of well-being, different categorizations of relationship types, and the inclusion of a wide range of covariates. Over and above people’s total amount of social interaction and the diversity of activities they engage in, the relational diversity of their social portfolio is a unique predictor of well-being, both between individuals and within individuals over time.

Press coverage:

NPR, Weak social ties are just as important as strong ones for greater life satisfaction

Hagerty, S. F., Mohan, B., & Norton, M. I. (2023). Whose pay should be cut in economic crises? Consumers prefer firms that prioritize paying employees over CEOs. Behavioural Public Policy, 7(3), 644–661.

Four experiments examine the impact of a firm deciding to no longer pay salaries for executives versus employees on consumer behavior, particularly in the context of the COVID-19 pandemic. Study 1 explores the effect of announcing either pay cessations or continued pay for either CEO or employees, and shows that firms’ commitment to maintaining employee pay leads to the most positive consumer reactions. Study 2 examines the effects of simultaneously announcing employee and CEO pay cessations: consumers respond most positively to firms prioritizing employee pay, regardless of their strategy for CEO pay. Moreover, these positive perceptions are mediated by perceptions of financial pain to employees, more than perceptions of CEO-to-worker pay ratio fairness. Study 3, using an incentive-compatible design, shows that firms’ commitment to paying employees their full wages matters more to consumers than cuts to executive pay, even when those executive pay cuts lead to a lower CEO-to-worker pay ratio. Study 4 tests our account in a non-COVID-19 context, and shows that consumers continue to react favorably to firms that maintain employee pay, but when loss is less salient, consumers prioritize cutting CEO pay and lowering the CEO-to-worker pay ratio. We discuss the implications of our results for firms and policy-makers during economic crises.

Working Papers

The Liberal Hypocrisy Effect: How Brand Political Ideology Shapes Consumer Judgment

Joseph J. Siev, Serena Hagerty, and Tami Kim

Lower-income individuals are often subject to harsher evaluations of their consumption decisions relative to their higher-income peers. This research investigates a novel mechanism for why these systematically negative judgments arise. Eight studies (and five replication studies) demonstrate an inequality in opportunity cost consideration. Across a variety of products and purchase situations, individuals are more likely to spontaneously generate opportunity costs when observing a purchase made by a low-income (vs. high-income or unknown income) consumer (Study1). Even when prompted to consider opportunity costs, those observing low-income consumers tend to consider alternatives that are more basic necessities than the purchased item, often considering alternatives that are outside the product category or the intended purpose of the purchase (Study 2). This inequality of opportunity cost consideration explains, in part, why the same items are perceived as less necessary for low-income consumers: individuals evaluating the necessity of a purchase made by a low-income consumer are spontaneously comparing it to more necessary alternatives, while purchases made by high-income consumers are less likely to be compared to foregone alternatives of any kind (Studies 3A and 3B). Importantly, when opportunity cost consideration is inhibited, the income effect on perceived necessity is mitigated (Studies 4A and 4B). These findings help explain why the purchases of low-income individuals are often scrutinized and deemed to be impermissible (Study 5) and, further, why low-income individuals are punished for how they choose to spend gifted or donated funds (Study 6).

Consumers Oppose Political Activism by Companies That Sell Necessities

Joseph J. Siev, Serena Hagerty, Tami Kim, and Luca Cian

Many consumers say companies should take stances on political issues, but surveys rarely ask whether specific types of companies should do so. The current research proposes that consumers view political activism as more acceptable for some firms than others, depending on the perceived necessity of what firms sell. Consumers believe companies that sell necessities (vs. non-essential goods/services) should avoid actions that limit access to their products or privilege some consumers’ access over others’. Because political activism is divisive, it seems inconsistent with that standard, and consumers want companies that sell necessities (vs. non-necessities) to avoid political activism. Four preregistered main studies and two supplementary experiments (N = 4,585) demonstrate this across various relevant industries (from carbonated beverages to trash collection) and political issues (from affirmative action to gun control to LGBTQ issues) and in real consumer-brand social media interactions. The effect of perceived product necessity on preferences for corporate political neutrality was especially robust among liberal consumers but often also emerged among conservatives. It was reduced when consumers regarded activism on a particular issue as compatible with ensuring universal access. Advancing marketing theory and managerial practice, these findings show that product type affects how consumers evaluate corporate political activism.

Consumer Responses to Premium Services: The Role of Zero-Sum Beliefs

Serena Hagerty, Debora V. Thompson, and Chris du Plessis

Many firms provide premium services that provide an enhanced level of customer experience for those who can afford them, benefiting both users and companies. However, premium services do not receive universal acceptance. Across six studies (N = 4,186), we find that consumers, under certain conditions, respond more negatively to premium (vs. non-premium) service growth strategies. This negative response is driven by zero-sum beliefs—beliefs that the introduction of premium services detracts from the experience of basic service users. Notably, these beliefs influence consumer reactions to premium service introductions, independently of considerations related to the affordability of the premium offerings. The negative effect of premium service introductions is most pronounced among individuals with weak beliefs in social mobility and among those that identify with a liberal political ideology. Our research demonstrates that firms can alleviate the negative response to the introduction of premium services by designing premium services with non-zero-sum features or by using profits from these services to subsidize non-premium options. By highlighting the role of zero-sum beliefs, we contribute to the literature on vertical line extensions, showcasing when and why non-premium consumers react negatively to premium service innovations.

Climbing the Ladder or Holding the Rung?: Prescribed Regulatory Focus Affects Financial Advice Given to Low-Income Individuals

Serena Hagerty, Tami Kim, and Joe Siev

Low-income individuals are often blamed for their economic standing and criticized for their financial decisions. Yet little is known about how society expects them to improve their finances. Should they focus on growing their wealth to climb the economic ladder, or on maintaining their finances to avoid falling further down the rungs? Eight studies investigate the type of financial advice individuals give low-income (vs. higher-income) others. We find systematic differences in financial advice type: across a variety of measures, people encourage those earning low incomes to prioritize financial maintenance (e.g., budgeting) over financial growth (e.g., investing), even when doing so leads to objectively suboptimal outcomes. Manipulating whether low-income participants made an incentive-compatible choice for themselves versus a low-income other reveals that maintenance-oriented advice is misaligned with recipients’ preferences: low-income consumers are far more interested in financial growth than others think. This mismatch occurs because people prescribe prevention-focused (promotion-focused) mindsets to low-income (higher-income) individuals. This emerges even when holding the advice recipient’s absolute income constant and manipulating relative perceptions of their income and generalizes across advisers of different income levels and subjective socioeconomic statuses. However, the effect is reduced among those who more strongly believe that upward economic mobility is possible.