Homelessness‐based impact hiring and consumers' contagion concerns

Abstract Prosocial company actions typically create favorable product evaluations. However, an emerging practice whereby companies employ individuals experiencing homelessness (i.e., “homelessness‐based impact hiring [IH]”) represents a meaningful exception. Five experiments show that consumers hold unfavorable perceptions of products from companies implementing homelessness‐based IH, despite moderately favorable moral judgments of the company, due to an unfavorable emotional response (i.e., disgust) activated by stigma‐driven contagion concerns. Experiment 1 demonstrates this phenomenon using actual choice behavior. Experiment 2 shows that the effect is specific to homelessness (vs. stigmatized groups in general) and is mediated by disgust. Experiment 3 replicates these effects using a non‐food product where contagion is relevant, while showing the effect attenuates when contagion is less relevant. Experiments 4 and 5 demonstrate how social proof may enhance the favorability of consumer response by targeting contagion concerns and therefore reducing disgust. Findings suggest that, despite consumer moral support, marketers cannot rely on halo effects from this emerging practice, while also providing theory‐driven guidance on overcoming obstacles to its implementation.