Consumer Spending Rises with Air Pollution: New Study

A study of South Korean consumers shows spending increases as air pollution levels rise.

The correlation is predominant among hedonic and pleasure-seeking categories as they help reduce negative emotions associated with poor air quality - like discomfort and anxiety - while people seek immediate gratification through shopping.

The study, published in the Journal of Marketing, has potentially significant implications for policymakers, as well as marketers, say co-authors Sanghwa Kim, assistant professor of marketing at McMaster University and Michael Trusov, Dean's Professor of Digital Marketing and Analytics at the University of Maryland’s Robert H. Smith School of Business.

Although air pollution implications are frequently studied, discussed and debated, little has been known about the effects of deteriorating air quality on consumer behavior and economic activities, the authors note. While businesses can adapt marketing strategies, policymakers have a new perspective for designing environmental and socioeconomic regulations.

Kim, a recent Smith PhD graduate, and Trusov conducted a quantitative analysis of credit card usage data alongside air quality index (AQI) tracking to establish the correlation and showed it as “pronounced among pleasure-seeking categories - from gourmet snacks and entertainment gadgets to wellness products - due to their ability to lift the mood of consumers.”

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

He adds, “Our suggestions are actionable toward designing responsible marketing campaigns such as eco-friendly products with hedonic, or pleasure-seeking, focus.”

The authors note that retailers and marketers may consider air quality trends when shaping their strategies, as consumer spending patterns shift with pollution levels. For example, businesses might adjust in-store ambiance, promotional timing, and digital outreach to align with changing consumer preferences. Additionally, brands could explore ways to position hedonic products more responsibly, incorporating sustainability and well-being into their messaging.

Regarding policy, the authors say, “Policymaking institutions can develop campaigns that associate air quality with everyday consumer choices and illuminate how environmental health contributes to individual well-being and economic stability.”

Their research findings and suggested actions for policymakers can work to increase consumer caution of 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 say business practitioners subsequently should capitalize on such heightened awareness by promoting healthier and more environmentally conscious alternatives.

Trusov reiterates, “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.”

The study is published in the Journal of Marketing as “The Impact of Air Pollution on Consumer Spending.”