Study: Consumer Spending Rises With Air Pollution

Spending increases as air pollution levels rise—a way to quash feelings of discomfort and anxiety caused by poor air quality with the immediate gratification of shopping, according to a recent study by University of Maryland researchers.

Published in the Journal of Marketing, the study could have significant implications for policymakers as well as marketers, said co-authors Michael Trusov, Dean’s Professor of Digital Marketing and Analytics at the Robert H. Smith School of Business, and Sanghwa Kim Ph.D. ’24, now an assistant professor of marketing at McMaster University in Ontario.

Although the health and environmental consequences of air pollution have been frequently studied, discussed and debated, little was known about the effects of deteriorating air quality on consumer behavior and economic activities, the authors said.

Kim, who completed his doctorate in business and management, and Trusov conducted a quantitative analysis of credit card usage data in South Korea alongside air quality index tracking to establish the correlation, and showed it was pronounced among “pleasure-seeking” product categories, “from gourmet snacks and entertainment gadgets to wellness products—due to their ability to lift the mood of consumers.”

Such spending carries the risk of “developing unhealthy and addictive routines in addition to negatively impacting households with revolving debt accumulation,” said Kim. “So, we’re presenting these findings in the spirit of protecting consumer well-being and societal welfare beyond simply serving profit-seeking purposes.”

According to the study, retailers and marketers may consider air quality trends when shaping their strategies, for example, by tweaking in-store ambiance, promotional timing and digital outreach. Brands could also explore ways to position these “hedonic” products more responsibly, incorporating sustainability and well-being into their messaging.

Their research findings suggest policymakers can work to increase consumer caution about overspending and overconsumption of unhealthy hedonic goods and services during periods of higher air pollution. Public initiatives could focus on fostering awareness of how environmental conditions influence consumer behavior, encouraging mindful spending habits during periods of poor air quality.

Kim and Trusov also said businesses could capitalize on such heightened awareness by promoting healthier and more environmentally conscious alternatives.

“Overall, this research advocates for marketing strategies with a strong focus on sustainability, aiming to balance business profits with societal values while promoting more responsible marketing for a better world,” Trusov said.