Driving Luxury Purchases: The Impact of Materialism and Money Attitudes on Conspicuous Consumption in Indonesia's Culture

Background: Conspicuous consumption, particularly luxury goods, is becoming increasingly prevalent in Indonesia, driven by materialism and specific money attitudes. Beyond individual desires for power, pleasure, and pride, social pressures to conform and display social status significantly influence consumer behaviour. Understanding the psychological drivers of such behaviour is crucial for shifting societal norms from saving-oriented to spending-oriented behaviour. Objectives: This study investigates the mediating role of materialism in the relationship between money attitudes, specifically power-prestige, and anxiety, and conspicuous consumption. It aims to examine how materialism shapes luxury consumption behaviours and the psychological and societal factors influencing young Indonesian consumers. Methodology: Data were collected from 249 participants (ages 18–25, M = 20.40, SD = 2.12) in Surabaya, Indonesia, using a convenience sampling method. Hayes’ Process Model 4 was used to assess materialism's mediating role between money attitudes and conspicuous consumption. Results: The results indicate that materialism significantly mediates the relationship between money attitudes, particularly power, prestige and anxiety, and conspicuous consumption. Materialistic individuals are more inclined to purchase luxury items to signal wealth and status, driven by personal desires and societal expectations. Parental financial support emerged as a critical factor, with fashion and accessories being the most common luxury purchases. Conclusion: Materialism is central in explaining how specific money attitudes lead to conspicuous consumption. The desire for social status and personal power, coupled with parental financial assistance, shapes luxury consumption patterns in Indonesia. Unique Contribution: These findings provide valuable insights into consumer behaviour in emerging markets, highlighting cultural, psychological, and societal influences on purchasing decisions. Key Recommendation: Promoting financial literacy, fostering prosocial values, and reducing social media exposure can help mitigate conspicuous consumption. Future studies should investigate the long-term effects of materialism and cultural influences on consumption behaviour.