How Perceived Economic Inequality Shapes Consumers' Preferences for Self‐Improvement Consumption

ABSTRACT Despite the increasing prevalence of self‐improvement products and services, what encourages consumers to choose such products requires further exploration. Drawing from tournament theory, which suggests that individuals exert greater effort when reward differentials across levels are large (vs. small), we show that perceived economic inequality is one of the factors that encourages consumers to choose self‐improvement products. Through 6 studies (including 2 supplementary studies) across 3 countries (i.e., the United States, Japan, and China; N = 2626), this research shows that high (vs. low) perceived economic inequality significantly increases consumers' preferences for self‐improvement (vs. non‐self‐improvement) products, and finds a significant indirect effect through heightened status ambition. Alternative explanations of status anxiety, loss of control, negative mood, and envy were not supported as mediators. However, this research did not find evidence that perceived social mobility moderates the relationship between perceived economic inequality and preferences for self‐improvement consumption. Study 4 further demonstrates that the main effect extends to more direct consumption‐related outcomes, including purchase intention and recommendation likelihood. Together, these findings suggest that demand for self‐improvement products is shaped by consumers' perceptions of the economic inequality, providing insights for consumers themselves and for self‐improvement–related firms to develop more effective promotion strategies across different economic contexts.