Journal of Marketing Theory and Practice

ISSN: 1069-6679 (Print) 1944-7175 (Online) Journal homepage: https://www.tandfonline.com/loi/mmtp20

Compulsive Buying Behavior in College Students:

The Mediating Role of Credit Card Misuse

Kay M. Palan , Paula C. Morrow , Allan Trapp & Virginia Blackburn

To cite this article: Kay M. Palan , Paula C. Morrow , Allan Trapp & Virginia Blackburn (2011)
Compulsive Buying Behavior in College Students: The Mediating Role of Credit Card Misuse,
Journal of Marketing Theory and Practice, 19:1, 81-96, DOI: 10.2753/MTP1069-6679190105

To link to this article: https://doi.org/10.2753/MTP1069-6679190105

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 Compulsive Buying Behavior in College Students:
The Mediating Role of Credit Card Misuse
Kay M. Palan, Paula C. Morrow, Allan Trapp, II, and Virginia Blackburn

This study investigates variables particularly salient to college students’ misuse of credit cards and com-
pulsive buying behavior that have not been previously examined together—self-esteem, power-prestige,
and risk-taking. In addition, the study proposes that credit card misuse mediates the relationship between
these variables and compulsive buying behavior. Using structural equation modeling, the fit of the overall
structural model is very good, and significant direct and indirect effects for power-prestige, but not for
self-esteem and risk-taking, are found. Managerial implications related to these findings are identified.

Compulsive buying behavior, generally thought to be a Mae (2009), a national provider of savings and paying for
chronic tendency to spend beyond one’s needs and means college programs, reported that 23 percent of college fresh-
(Mittal et al. 2008), is increasingly recognized as a grow- men arrived on campus with credit cards in 2001 but that
ing problem among U.S. college students (Norum 2008; this percentage increased to 39 percent in 2008. The pro-
Roberts 1998; Wang and Xiao 2009) and consumers in gen- vider further reported the average credit card debt among
eral (Benson 2000). One of the primary factors attributed college students at $3,173 in 2008. Moreover, 82 percent
to this increase is that we live in a consumer culture that did not pay off their credit card debt each month and thus
embraces materialism (Belk 1985; Chaplin and Roedder John incurred finance charges each month. Some of the credit
2007). The majority of Americans desire to consume and card charges are related to attending college, such as books
display goods that confer status and power and that fulfill and supplies, and about 30 percent put tuition on their
pleasure-seeking needs (Belk 1988); college students are not credit cards (Sallie Mae 2009). However, college students
immune from the desire to consume. Droge and Mackoy freely acknowledge that they use their credit cards to pay
(1995) believe there is almost a universal aspiration among for discretionary items such as food away from home, en-
Americans to be a member of the consumer culture. tertainment, alcoholic beverages, and tobacco (Joo, Grable,
Evidence of college students’ desire to consume is and Bagwell 2003). In addition to credit card debt, four-
increased credit card use among that cohort, which has year college graduates leave college with an average of just
generated significant worry among educators, parents, and over $19,000 in college loan debt (Block 2006; Kantrowitz
regulatory groups (Dickler 2008; Hook 2006; Mansfield and 2008). So, at a time when college graduates should be em-
Pinto 2007). Bernthal, Crockett, and Rose (2005) describe barking on new careers and entering the stage of life when
credit cards as lifestyle facilitators, a tool that consumers use they begin to create wealth, many are now saddled with
to manage and regulate their lifestyles, and college students’ burdensome debt loads that inhibit their ability to fully
access to credit through credit cards is unprecedented. Sallie achieve economic independence. Moreover, these personal
financial problems will be compounded for those students
Kay M. Palan (Ph.D., Texas Tech University), Professor of Market- with compulsive buying tendencies—they potentially face
ing, Haworth College of Business, Western Michigan University, not just credit card debt, but also depression, anxiety, and
Kalamazoo, MI, kay.palan@wmich.edu. broken relationships (Roberts and Jones 2001).
Paula C. Morrow (Ph.D., Iowa State University) University Pro- Given these issues, the purpose of this paper is to ex-
fessor of Management, Max S. Wortman, Jr., Professor of Man- amine a conceptual model (shown in Figure 1) that posits
agement, College of Business, Iowa State University, Ames, IA,
pmorrow@iastate.edu.
college students’ credit card misuse as a behavior that me-
diates relationships between three personal characteristics
Allan Trapp, II (M.S., Iowa State University), Ph.D. candidate,
Department of Statistics, Iowa State University, Ames, IA, atrapp@ particularly salient to college-age individuals—self-esteem,
iastate.edu.
Virginia Blackburn (DBA, University of Kentucky), Associate Pro- The authors thank the Center for Excellence in Learning and
fessor of Management, College of Business, Iowa State University, Teaching and the College of Business at Iowa State University for
Ames, IA, vblackbu@iastate.edu. financial support of this research.

Journal of Marketing Theory and Practice, vol. 19, no. 1 (winter 2011), pp. 81–96.
© 2011 M.E. Sharpe, Inc. All rights reserved.
ISSN 1069-6679/2011 $9.50 + 0.00.
DOI 10.2753/MTP1069-6679190105
82  Journal of Marketing Theory and Practice

Figure 1
Hypothesized Model and Results

Notes: All coefficients are standardized. Dotted lines represent relationships that were hypothesized but not supported. * p < 0.05;
** p < 0.01; *** p < 0.001.

power-prestige (i.e., the extent to which money is thought to explain the effects between the independent variables
to be a source of power or prestige), and risk-taking—and and compulsive buying rather than just identifying factors
compulsive buying behavior. Previous studies have linked that strengthen or weaken relationships (Baron and Kenny
college student risk-taking with identity formation (Shapiro 1986). Stated differently, the current study addresses gaps
et al. 1998; Siegel et al. 1994). Moreover, the consumption in previous research by examining whether self-esteem,
lifestyle in which college students have been raised drives power-prestige, and risk-taking have a direct effect on credit
individuals to use the power and prestige that money rep- card misuse, which in turn affects compulsive buying be-
resents to enhance their self-esteem (Chatterjee and Farkas havior. We present a brief literature review on the variables
1992; Dittmar and Drury 2000; Hanley and Wilhelm 1992; in the model and then report the results of survey data col-
Watson 2003). Self-esteem and power-prestige have been lected from 260 college seniors. Implications of the study’s
previously identified as significantly related to compulsive findings for public policymakers, business managers, and
buying (Norum 2008; O’Guinn and Faber 1989; Roberts and researchers are discussed.
Jones 2001), and risk-taking, a dimension of self-control,
has been shown to be significantly related to whether or Compulsive Buying Behavior
not college students carry credit card debt (Mansfield,
Pinto, and Parente 2003). However, previous research has Compulsive buying, a behavior distinct from compulsive
not examined these three explanatory factors together in shopping (Nataraajan and Goff 1992), is medically defined
the same conceptual model. Consideration of these three as an impulse control disorder, a mental disorder charac-
independent variables in combination might shed light on terized by irresistible impulses to engage in harmful or
why college students are so susceptible to credit card misuse senseless behaviors (Black 2007; McElroy, Phillips, and Keck
and compulsive buying. 1994) in order to counteract negative emotional situations
Previous research has found that credit card use moder- such as depression and loneliness (Krueger 1988). Consistent
ates compulsive buying behavior (Roberts and Jones 2001) with the medical definition, early conceptualizations of
by serving to diminish or exacerbate the role of individual compulsive buying within the field of marketing defined
differences—in this case, attitudes about money—on com- it as “chronic, repetitive purchasing that becomes a pri-
pulsive buying behavior. In contrast to this perspective, we mary response to negative events or feelings” (O’Guinn
investigate whether credit card misuse acts as a mediating and Faber 1989, p. 155). Using this definition, a relatively
variable instead of as a moderating variable in an effort small percentage of the population is classified as being
 Winter 2011  83

compulsive; recent estimates range from 6 to 12.2 percent 1982)—power-prestige, distrust, and anxiety—on compulsive
of young adults (Hassay and Smith 1996; Roberts 1998; buying among a sample of college students. They found
Roberts and Jones 2001). Research studies that adopt this that both power-prestige and anxiety were significantly
perspective of compulsive buying tend to compare con- positively related to compulsive buying, whereas distrust
sumers classified as compulsive with “normal” consumers was significantly negatively related to compulsive buying.
(e.g., Faber and O’Guinn 1988; O’Guinn and Faber 1989; Norum (2008) also recently found that power-prestige and
Roberts and Jones 2001). anxiety were positively associated with compulsive buying.
The current study, however, adopts an alternative con- d’Astous (1990) reported a significant negative relationship
ceptualization of compulsive buying, consistent with more between self-esteem and compulsive buying and a signifi-
recent marketing research that considers compulsive buying cant positive relationship between irrational use of credit
to be a behavior in which a much larger proportion of the cards and compulsive buying. Desarbo and Edwards (1996)
population engages (Neuner, Raab, and Reisch 2005; Norum found that different sets of variables were associated with
2008; Ridgway, Kukar-Kinney, and Monroe 2008; Wang and compulsive buying, depending on respondents’ motivations
Xiao 2009). This perspective considers compulsive buying to be compulsive. Those they labeled as internally motivated
to be less extreme than previously thought and akin to an were driven by low self-esteem, dependence, and anxiety.
episodic urge to buy (d’Astous 1990; Manolis and Roberts In contrast, externally motivated respondents were driven by
2008). Wang and Xiao (2009) assert that college students materialism, coping, isolation, denial, and impulsiveness.
are especially vulnerable to compulsive buying because Desarbo and Edwards (1996) concluded that there may be
they seek peer approval through participation in activities different paths to compulsive buying behaviors, which has
and acquisition of material goods that require financial implications for how compulsive buying is prevented and
resources they may not have. Based on this understanding, treated. Roberts and Tanner (2000) reported significant cor-
Edwards defined compulsive buying as relations between the use of cigarettes, alcohol, and illegal
drugs with adolescents’ compulsive buying behaviors, and
an abnormal form of shopping and spending in
which the afflicted consumer has an overpowering, Norum (2008) found similar relations between the use of
uncontrollable, chronic and repetitive urge to shop cigarettes, alcohol, and engaging in unprotected sex and
and spend as a means of alleviating negative feelings compulsive buying among college students.
of stress and anxiety. (1992, p. 7) The three antecedents of compulsive buying selected for
examination in this study were based on their relevance
Research studies taking this approach view compulsive buy-
to college students and how these individual differences
ing behaviors as lying along a continuum anchored with
might contribute to the irresponsible use of credit cards
recreational and incidental uncontrolled buying on one end
(i.e., credit card misuse). A critical aspect of college adjust-
to chronic and addictive buying on the other end (Edwards
ment is finding social groups with which one identifies
1992, 1993). The recreational/incidental uncontrolled buy-
(Newman, Keough, and Lee 2009; Reed et al. 2007). Ac-
ing end of the continuum might also be considered to be
cording to social identity theory (Hogg and Terry 2000;
impulse buying, which has been defined as
Tajfel and Turner 1986), the memberships and interactions
unplanned purchases, undertaken with little or no de- that individuals have with groups contribute to their sense
liberation, accompanied by affectual or mood states, of self. Individuals will alter their behaviors to adopt the
which furthermore are not compelled, and which, group norms, values, and beliefs (Turner and Onorato 1999).
finally, are contrary to the buyer’s better judgment.
(Wood 1998, p. 299) Salient to this study is that an individual’s self-esteem in-
creases as the relative status of the group to which he or she
Several different variables have been associated with com- belongs increases (Brewer, Manzi, and Shaw 1993), which
pulsive behavior, including obsessiveness-compulsiveness, motivates individuals to seek higher-status group member-
self-esteem, fantasy, materialism, envy, object attachment, ships. The competitive drive to belong to higher-status
emotional lift, risky behaviors, remorse, number of credit groups creates a struggle for power, prestige, superiority,
cards owned, credit cards paid in full each month, credit and material advantage (Abrams and Hogg 1990). Thus, the
cards within $100 of their limit, and percent of monthly push for higher self-esteem through a display of prestige
income going to debt (O’Guinn and Faber 1989). Roberts and material goods in an age group well documented to
and Jones (2001) examined the relationship of three dimen- still be forming their self-identity (Erikson 1950) and to
sions of the “money attitude scale” (Yamauchi and Templer be risk-takers (Scott, Reppucci, and Woolard 1995) makes
84  Journal of Marketing Theory and Practice

college students ripe to misuse credit cards and to engage in Hypothesis 1b: Self-esteem is negatively related to com-
compulsive buying at some level. Below, we further discuss pulsive buying behavior.
how self-esteem, power-prestige, and risk-taking contribute
to understanding college students’ compulsive buying and Power-Prestige
credit card misuse.
Power-prestige is one of the dimensions of the money at-
titude scale developed by Yamauchi and Templer (1982)
Self-Esteem and represents the use of money to influence and impress
Self-esteem is an individual’s sense of self-worth and how others and to symbolize success. Money, of course, is
much a person likes, accepts, and respects him- or herself generally necessary to obtain goods and services, serv-
for who he or she is. Pascarella and Terenzini (1991) suggest ing in an instrumental capacity. But for some people,
that college students’ sense of self-worth is influenced by money is equivalent to power and to status (Roberts and
their environment and life experiences and will be par- Jones 2001; Rubenstein 1981). Money enables consumers
ticularly influenced by relationships and evaluations of to engage in status consumption, a “form of power that
others. Salient to this study is that self-esteem, although consists of respect, consideration, and envy from others
formed in childhood, tends to undergo some adjustment and represents the goals of a culture” (Csikszentmihalyi
during the college years (Pascerella and Terenzini 1991), in and Rochberg-Halton 1981, p.  39). Thus, consumers
part because identity formation does not begin until the demonstrate their social power to others by engaging in
late teens and early twenties, when most individuals are in conspicuous consumption and display of status products
college (Erikson 1950). (Bell 1998; Eastman et al. 1997). Both male and female
High self-esteem individuals are self-confident and less young adults closely link money with esteem and power
susceptible to emotional problems, such as depression and (Prince 1993), and, particularly relevant to this study,
mood swings (Yelsma and Yelsma 1998). They have better education has been significantly positively correlated to
coping skills, making them better able to deal with un- status-seeking behaviors (Chao and Schor 1998). Impor-
certainty and difficult situations, whereas low self-esteem tantly, Tokunaga (1993) found that individuals were likely
individuals report more negative emotional states and ex- to be irresponsible credit users when they viewed money
perience higher anxiety and distress (Brown and Marshall as a source of power and prestige.
2001; Cast and Burke 2002; Yelsma and Yelsma 1998). Sev- As previously noted, power-prestige has been found
eral studies have significantly linked self-esteem to compul- to be significantly positively related to compulsive buy-
sive buying behavior. Specifically, low self-esteem has been ing behaviors among college students (see, e.g., Roberts
associated with a high generalized urge to buy (d’Astous 1998). Moreover, this relationship has been found to be
1990) and compulsive buying (Faber and O’Guinn 1988, significantly moderated by credit card behavior. Specifi-
1989; Hanley and Wilhelm 1992; Roberts 1998; Yurchisin cally, power-prestige was significantly related to compul-
and Johnson 2004). Research on self-esteem and credit sive buying when college students were irresponsible with
card behavior is sparse. Contrary to expectations, Pinto, respect to their credit card use; when credit cards were
Mansfield, and Parente (2004) did not find any significant used responsibly, the relationship between power-prestige
relationship between self-esteem and credit card debt. But and compulsive buying was not significant (Roberts and
when debt is more broadly defined, that is, not limited to Jones 2001). Power-prestige has also been reported as
credit card debt, a clearer pattern emerges. Norvilitis et al. significantly higher when individuals report a lower level
(2006) indicate that the research supports a negative rela- of economic self-efficacy, defined as the confidence an
tionship between self-esteem and acquisition of debt. They individual has to cope with his or her financial situation
further stipulate, however, that it is unclear as to whether (Engelberg 2007). Based on these prior findings, we posit
low self-esteem causes people to go into debt, debt decreases the following hypotheses:
self-esteem, or some third factor is at work. Because using Hypothesis 2a: Higher levels of power-prestige are posi-
credit cards unwisely contributes to debt acquisition, we tively related to higher levels of credit card misuse.
hypothesize the following relationships:
Hypothesis 2b: Higher le vels of power-prestige are
Hypothesis 1a: Self-esteem is negatively related to credit positively related to higher levels of compulsive buying
card misuse. behavior.
 Winter 2011  85

Risk-Taking Risk-taking has been identified as one of six dimen-

sions of self-control (Barlow 1991; Grasmick et al. 1993).
A variable that has not received much attention with respect Self-control, defined as an individual’s capacity to regulate
to college students’ compulsive buying behaviors is risk- his or her cognitive, emotional, and behavioral states and
taking. Risk-taking is the tendency to be adventuresome and responses (Baumeister 2002), has been shown to be sig-
to engage in exciting, risky, or thrilling activities (Barlow nificantly related to credit card use among college students
1991; Gottfredson and Hirschi 1990; Grasmick et al. 1993). and compulsive buying (Mowen 2000). Kidwell and Turrisi
Risk-taking is associated with adolescence and early adult- (2004) found that perceived control played an important
hood (Scott, Reppucci, and Woolard 1995) and, in fact, role in college student intent to maintain a budget. In ad-
is considered to be a normal part of the developmental dition, another dimension of self-control, impulsivity, was
process (Baumrind 1987). Individuals in these age groups positively associated with credit card debt among college
participate in various kinds of risky behaviors—drug and students (Mansfield, Pinto, and Parente 2003). Because
alcohol use, unprotected sex, extreme and dangerous sports, credit card misuse and compulsive buying both reflect a
driving fast, illegal activities—because they feel they are im- lack of self-control, we expect to see higher levels of risk-
mune to anything bad happening to them. This sense of taking to be associated with higher levels of credit card
invulnerability stems from their assessment of and attitude misuse and compulsive buying, leading to the following
toward risk, although there may also be a relationship to hypotheses:
self-control and impulsivity (Scott, Reppucci, and Woolard
Hypothesis 3a: Higher levels of risk-taking are positively
1995). However, risk-taking is not necessarily always associ-
related to higher levels of credit card misuse.
ated with problem behaviors; risk-taking can be functional,
purposive, instrumental, and goal directed (Jessor 1991). Hypothesis 3b: Higher levels of risk-taking are positively
As reported, two studies (Norum 2008; Roberts and related to higher levels of compulsive buying behavior.
Tanner 2000) have linked risky behaviors of high school
teens and college students with compulsive buying. Within Credit Card MISuse Among
the context of consumer research, risk is associated with College Students
uncertainty and ambiguity (Campbell and Goodstein 2001;
Kahn and Sarin 1988) and will be affected significantly by College students are a very attractive credit card market
context (Kahn and Sarin 1988) and the expected outcome (Mansfield and Pinto 2007), in part because there is a
(Oglethorpe and Monroe 1987). For example, the more im- continual influx of potential credit card owners into this
portant the situation or desired outcome, the more likely it age group every year who may develop into lifelong users
will be for a consumer to experience higher perceived risk. (Hayhoe et al. 2000), but also because college students’
Research suggests that individuals will respond to different brand loyalty to credit cards is stronger than to most
domains of risk depending on the importance, familiarity, other products or services (Hein 2003). Sallie Mae (2009)
and moral relevance of the choices (Rettinger and Hastie reports that 84 percent of undergraduates have at least one
2001). With respect to the current study, two domains of credit card and the average student has 4.6 cards. Hayhoe,
risk—financial and social—are relevant. The outcomes associ- Leach, and Turner (1999) and Hayhoe et al. (2000) found
ated with financial risks are either a monetary gain or loss, a significant positive relationship between the number
and, as long as the payoffs and probabilities are equivalent, of credit cards owned and positive attitude toward credit
the assumption is that consumers will respond to gambles cards. Median credit card debt ranges from $939 for college
consistently (Mandel 2003). The consequences of social risk, freshmen to an average of $4,100 during the final year of
however, are either embarrassment/disapproval or esteem/ college (Sallie Mae 2009).
approval among one’s friends and family (Mandel 2003). In the minds of college students, credit cards are as-
Importantly, individuals who are interdependent, that is, sociated with spending. Feinberg (1986) found that when
their status depends on membership within a larger social college students were exposed to a credit card logo when
group, are more likely to focus on preventing losses (Aaker evaluating a product, they were more likely to quickly de-
and Lee 2001) because they want to avoid embarrassment. cide to purchase, to make the purchase, and to spend more
Mandel (2003) found that when the interdependent self than students who were not exposed to a credit card logo.
was activated, individuals took more financial risks but Moreover, college students perceive themselves as lacking
fewer social risks. the knowledge they need to effectively manage their credit
86  Journal of Marketing Theory and Practice

card use (Norvilitis and Santa Maria 2002; Yarema and a lottery drawing for a $500 cash prize. The online format
Sampson 2001), which may contribute to overspending was selected for several reasons. Beyond ease of use, cost
and credit card abuse. savings, and convenience, research has shown that online
Compulsive buying is more likely to be found among surveys typically yield higher response rates than mailed or
consumers who have a large number of credit cards traditional paper-and-pencil surveys and demonstrate few
(O’Guinn and Faber 1989; Roberts 1998) and who carry differences when compared with mailed surveys (Ballard
large credit card balances (Ritzer 1995). Compulsive buy- and Prine 2002; Hill, Ferris, and Martinson 2003; Kaplowitz,
ing has also been significantly linked to irrational use of Hadlock, and Levine 2004; McCabe 2004).
credit (d’Astous 1990; Roberts 1998). Previous research has Excluding surveys with missing data, usable survey data
established that credit card use moderated the relationship were secured from 260 students, yielding a response rate
between money attitudes and college students’ compulsive of 47.3 percent. The sample consisted of 151 males (58.1
buying behavior (Roberts and Jones 2001), finding that percent) and 109 females (41.9 percent). Respondents
greater misuse of credit cards exacerbated compulsive buy- ranged in age from 21 to 53, with a mean of 23.01 years,
ing. The literature review provided in this paper, however, indicating that most of the students were traditional college
supports the potential of credit card misuse to mediate students. All the business majors offered by the college were
the relationships between the independent variables—self- represented. The overwhelming majority of the students
esteem, power-prestige, and risk-taking—and the dependent were single (80.7 percent) and in-state residents (82.3 per-
variable, compulsive buying behavior. We have articulated cent) for tuition purposes. University rules for surveying
reasons as to why all three of the independent variables undergraduate students precluded standard techniques for
in this study might be expected to have some linkage to assessing nonresponse bias. However, statistics obtained
credit card misuse; further, credit card misuse has been for seniors at the college during the data collection show
shown to be significantly related to compulsive buying. that 65 percent are male, the average age is 23 years, 79.1
Thus, we expect credit card misuse to significantly mediate percent reside in-state, and over 90 percent are single,
the relationships between the independent variables—self- suggesting that the sample is fairly representative of the
esteem, power-prestige, and risk-taking—and the dependent college population.
variable, compulsive buying, and propose the following A college sample was deliberately selected for this re-
hypotheses: search for several reasons. First, as already noted, debt
among this population is a significant social problem.
Hypothesis 4: Higher levels of credit card misuse are posi-
Second, compulsive buying among college students has
tively related to higher levels of compulsive buying.
an explicit research tradition (Manolis and Roberts 2008),
Hypothesis 5a: Credit card misuse mediates the rela- and this research seeks to increase understanding of such
tionship between self-esteem and compulsive buying behavior in this specific population. Last, college students
behavior. represent a natural laboratory of sorts. They begin college
with little or no debt, and what transpires during the col-
Hypothesis 5b: Credit card misuse mediates the rela-
lege years is often the acquisition of debt.
tionship between power-prestige and compulsive buying
behavior.
Measures
Hypothesis 5c: Credit card misuse mediates the rela-
tionship between risk-taking and compulsive buying A summary of the operationalization of each of the five
behavior. latent factors is provided below. Descriptive statistics and
intercorrelations of the factors are provided in Table 1. The
specific measure (indicator) variables for each of the factors
Method
may be found in Table 2. Statistical verification of these five
Sample constructs is outlined in the results section.

Five hundred and fifty undergraduate senior business Compulsive Buying

majors enrolled in a required capstone course at a major
public midwestern university were asked to complete a Three items from the compulsive buying measurement
financial literacy and spending practices online (Web) sur- scale developed by Faber and O’Guinn (1992) were selected
vey. Students who completed the survey were entered into as indicators of compulsive buying. The measure utilized a
 Winter 2011  87

Table 1
Descriptive Statistics and Correlations

Mean
(Standard
Deviation) 1 2 3 4 5

1. Self-Esteem 4.21 1.000 0.009 0.023 0.002 0.000

(0.65)
2. Power-Prestige 2.36 0.093 1.000 0.075 0.048 0.078
(1.00)
3. Risk-Taking 2.84 0.152* 0.274*** 1.000 0.010 0.001
(1.23)
4. Credit Card Misuse 2.25 0.039 0.220** 0.102 1.000 0.402
(1.11)
5. Compulsive Buying 2.14 –0.018 0.280*** 0.033 0.634*** 1.000
(0.72)

Note: Values below the diagonal are correlation estimates. Values above the diagonal are squared correlations. *** Correlation is significant at the
p < 0.001 level (two-tailed); ** correlation is significant at the p < 0.01 level (two-tailed); * correlation is significant at the p < 0.05 level (two-tailed).

1 = “never” to 5 = “very often” response option framework, 5 = “strongly agree” Likert-type response framework with
with higher scores indicating higher levels of compulsive higher scores indicating positive self-esteem.
buying. Traditionally, this measure has been used to iden-
tify individuals who have a chronic tendency to purchase
Power-Prestige
in excess of their needs and means. However, based on the
growing opinion that compulsive buying behavior may Three items were selected as indicators of power-prestige
be more commonplace, this study conceptualized and from the power-prestige dimension of Yamauchi and
measured compulsive buying as a continuous phenom- Templer’s (1982) money attitude scale. Responses were
enon. Other researchers (e.g., Rindfleisch, Burroughs, and indicated on a 1  =  “never” to 7  =  “always” Likert-type
Denton 1997; Wang and Xiao 2009) have also followed this response format with higher scores indicating a stronger
approach. In this study, the composite scale mean (2.14) need for power-prestige.
and standard deviation (0.72), along with the individual
indicator means ranging from 1.85 to 2.54 (see Tables  1
Risk-Taking
and 2), support the contention that compulsive buying may
occur more commonly than previously thought. Risk-taking, sometimes called “risk-seeking,” was measured
with three items adapted from a risk-taking scale developed
Credit Card Misuse by Grasmick et al. (1993) and used extensively by others
(Mansfield, Pinto, and Parente 2003). The scale employs
Three items were selected as indicators of credit card misuse a 1 = “never” to 7 = “always” Likert-type response format
from Roberts and Jones’s (2001) propensity to misuse credit with higher scores indicating higher risk-taking.
cards measure. The measure used a 1 = “strongly disagree”
to 5  =  “strongly agree” Likert-type response framework
and is scored such that higher scores indicate poor credit Results
card habits. Statistical Assessment of Measurement Model

Self-Esteem Confirmatory factor analysis (CFA) was conducted to

verify that pertinent indicator variables were selected for
Three indicators for self-esteem were adapted from a scale each of the five factors. The TCALIS procedure in SAS (ver-
developed by Rosenberg (1965) traditionally used in com- sion 9.2) was employed to carry out this analysis. In the
pulsive buying and credit card studies (e.g., Roberts 1998). CFA, we assumed that every possible pair of latent factors
Responses were measured with a 1 = “strongly disagree” to was correlated. Furthermore, for each indicator, only one
 Table 2
Statistical Results for the Hypothesized Structural Model

Parameter Standard Cronbach’s Variance

Constructs and Items Estimate Mean Deviation Alpha Extracted

Compulsive Buying 0.700 0.489

88  Journal of Marketing Theory and Practice

  Felt others would be horrified if they knew of my spending habits. 0.818 1.850 0.038
  Bought things even though I couldn’t afford them. 0.792 2.038 0.039
  Bought myself something in order to make myself feel better. 0.415 2.535 0.058
Credit Card Misuse 0.888 0.733
  I am less concerned with the price of a product when I use a credit card. 0.809 2.031 0.026
  I am more impulsive when I shop with credit cards. 0.885 2.254 0.021
  I spend more when I use credit cards. 0.873 2.385 0.021
Self-Esteem 0.837 0.757
  I feel that I have a number of good qualities. 0.912 4.204 0.019
  I am able to do things as well as most people. 0.937 4.108 0.017
  I feel that I am a person of worth, at least on an equal plane with others. 0.749 4.177 0.030
Power-Prestige 0.708 0.473
  Although I should judge the success of people by their deeds, I am more 0.715 2.769 0.050
   influenced by the amount of money they have.
  People I know tell me that I place too much emphasis on the amount of 0.662 1.769 0.051
   money a person has as a sign of success.
  I seem to find that I show more respect to people with more money than 0.685 2.435 0.051
   I have.
Risk-Taking 0.880 0.737
  I like to test myself every now and then by doing something a little risky. 0.901 3.008 0.020
  Sometimes I will take a risk just for the fun of it. 0.957 2.935 0.018
  Excitement and adventure are more important to me than security. 0.695 2.438 0.035

Note: Standardized estimates and Cronbach’s α reported. All estimates significant at p < 0.001.
 Winter 2011  89

factor loaded on it, and all the measurement errors of the good model fit (Hair et al. 2006). Thus, the overall statisti-
indicators were assumed independent of one another. The cal fit of the mediating path model is sufficiently strong for
model was identified by restricting each of the latent factor examination of the hypothesized relationship paths.
variances to one.
The statistical results for this analysis are produced Hypothesis Testing
in Table 2. Convergent validity is confirmed through the
parameter estimates and Cronbach’s alpha. Discriminant In the hypothesized latent model (Figure 1), self-esteem,
validity is verified through the variance extracted statistic. power-prestige, and risk-taking were modeled as exogenous
All the constructs either met, exceeded, or were very near variables, whereas compulsive buying and credit card misuse
target values (parameter estimates > 0.5 or, ideally, > 0.7; were modeled as endogenous variables. Credit card use was
Cronbach’s α > 0.7; and variance extracted > 0.5) (Hair et a mediating variable between the three exogenous variables
al. 2006). A comparison of the variance extracted shows and the endogenous variable, compulsive buying.
that all of the variance extracted estimates from Table 2 Hypotheses 1 through 3 examined the direct effects in
are greater than the corresponding interconstruct squared the model. Hypotheses 1a, 2a, and 3a examined the rela-
correlation estimates in Table 1 (above the diagonal). This tionships between self-esteem, power-prestige, and risk-
finding suggests that there are no problems with discrimi- taking with credit card misuse, while Hypotheses 1b, 2b,
nant validity (Hair et al. 2006). Thus, there is sufficient sta- and 3b examined the relationships between the exogenous
tistical evidence to support the existence of the five factors variables and compulsive buying. Contrary to expectations,
and that the selected measures are reasonable indicators of neither self-esteem nor risk-taking was significantly related
their corresponding factors. to either credit card misuse or to compulsive buying. Only
power-prestige was significantly positively related to credit
Mediating Path Model card misuse (γ = 0.21, t = 2.64, p = 0.008) and to compulsive
buying (γ = 0.17, t = 2.31, p = 0.02). That is, as power-prestige
Figure 1 displays the latent variable portion of the path increases, credit card misuse and compulsive buying behav-
model and Table  2 provides the measurement portion. ior are expected to increase. Thus, only Hypotheses 2a and
Because the latent model is fully recursive and the CFA 2b were supported
was performed under the previously stated statistical as- Hypothesis 4 posited that credit card misuse is signifi-
sumptions, the factor loadings from the CFA and this path cantly positively related to compulsive buying. The direct
model are the same. The lower diagonal of Table 1 shows effect between these two constructs (β  =  0.61, t  =  11.32,
the correlations of the latent factors. These three statistical p = 0.00) was significant as expected. Increased credit card
summaries holistically represent the path model. misuse is significantly related to higher levels of compulsive
In the correlation matrix of Table 1, several significant buying. Thus, Hypothesis 4 is supported.
correlations between factors are found. The correlations Hypotheses 5a, 5b, and 5c examined whether or not
between self-esteem and risk-taking (r  =  0.152, p  <  0.05) credit card misuse mediated the relationship between the
and power-prestige and risk-taking (r = 0.274, p < 0.001) are exogenous variables and compulsive buying. Because no
noteworthy because we have not assumed any direct paths significant direct effects were found for either self-esteem or
between these factors. risk-taking, mediation analysis was limited to the relation-
The overall fit statistics indicate that the path model ship between power-prestige and compulsive buying only.
had a good overall fit. The χ2 is 73.86 with 80 degrees of As previously reported, significant direct effects necessary
freedom; the p‑value is 0.6719. A nonsignificant chi-squared to establish mediation were found between power-prestige
result is optimal, indicating there is no significant difference and compulsive buying, power-prestige and credit card
between the observed covariance matrix and the implied misuse, and credit card misuse and compulsive buying. As a
covariance matrix that is estimated through variances and final step to determine if a significant mediation effect was
covariances of indicator variables. Additional fit indices present between power-prestige and compulsive buying, we
provide further evidence of good model fit. The root mean compared the direct effect of power-prestige on compulsive
square error of approximation (RMSEA) estimate was 0.000; buying to the indirect effect of power-prestige through the
the goodness-of-fit index (GFI) is 0.9635; adjusted goodness- mediator, credit card misuse. The indirect effect for power-
of-fit index (AGFI) is 0.9453; and the comparative fit index prestige was significant (γ = 0.13, t = 2.62, p = 0.008), sup-
(CFI) was 1.000—all these results exceed the guidelines for porting a finding of complementary or partial mediation
90  Journal of Marketing Theory and Practice

Figure 2
Alternative (Restrictive) Model and Results

Notes: All coefficients are standardized. ** p < 0.01; *** p < 0.001.

(Zhao, Lynch, and Chen 2010). Thus, Hypothesis  5b is perhaps would not be made if purchasing with cash. Such
supported and Hypotheses 5a and 5c are not. misuse, if not kept in check, can precipitate compulsive
buying behaviors that could develop into lifelong buying
Alternative Model behaviors among this population. More importantly, the
findings further show that the effect of power-prestige on
Based on the results of the hypothesized model, a restric- compulsive buying is mediated by credit card misuse. By
tive nested model was specified that removed the paths examining credit card misuse as a mediator rather than as a
between the exogenous variables of self-esteem and risk- moderator, this study helps explain how this variable affects
taking with the endogenous variables (Figure  2). The compulsive behavior, an important extension of previous
overall fit statistics for this restrictive model indicate good research. More specifically, this finding is reassuring in
overall fit (χ284df = 76.14, p < 0.7169; RMSEA estimate = 0.00, that while attitudes toward money are likely formed during
GFI  =  0.9624, AGFI  =  0.9463, CFI  =  1.00). To determine childhood (Hanley and Wilhelm 1992) and challenging to
whether the restrictive model fits the data best (the null change, they are more malleable and subject to intervention
hypothesis), we conducted a likelihood ratio test, finding than personality traits. Thus, there are strong prospects
χ24df = 2.52. The nonsignificant chi-square suggests that the for reducing credit card misuse and decreasing compul-
fit is not improved significantly, so the null hypothesis is sive buying through greater awareness and educational
not rejected. Nonetheless, lacking statistically significant efforts. In addition, the importance of power-prestige is
evidence to support the hypothesized model as the bet- further bolstered when this study’s results are considered
ter fit, the restrictive model is preferred because it is less in conjunction with prior studies. Norum (2008) recently
complex than the hypothesized model. observed that power-prestige was a strong predictor of
compulsive buying and Roberts and Jones (2001) found
Discussion credit card usage to moderate relations between power-
prestige and compulsive buying. Subsequent studies are
The findings of this study make significant contributions to needed to confirm the exact role of power-prestige, but its
the understanding of compulsive buying behavior among significant role across multiple studies suggest it deserves
college students. First, the findings show that credit card further consideration.
misuse by college students is directly related to compulsive Another important contribution of this study is that
buying behaviors. Using credit cards makes it easier to spend the results support the idea that an uncontrollable urge
beyond one’s means and to make impulsive purchases that to buy is not limited to a small percentage of the college
 Winter 2011  91

population, that is, this study treated compulsive buying college students’ credit card debt, credit card debt for U.S.
as a variable behavior ranging in frequency rather than a families continues to rise; college students only differ in
dichotomous attribute (i.e., where people are classified as the amount of time they have acquired their debt burdens.
compulsive buyers or not). Clearly, marketers, economists, Moreover, there is an increasing tendency by consumers
psychologists, and financial educators stand much to gain to buy compulsively (Muller and de Zwaan 2004; Neuner,
by considering compulsive buying as a behavior that many Raab, and Reisch 2005). Thus, this study bears significant
consumers fall victim to, even if infrequently. Further, our practical implications for understanding and addressing
suggestion that the conceptualization and measurement the problem of credit card misuse not only among college
of compulsive buying merits reassessment is consistent students but within the general population as well.
with other researchers who have recently questioned First, the significant positive relationship between credit
the pervasiveness of compulsive buying behavior and its card misuse and compulsive buying suggests the critical
consequences (e.g., Manolis and Roberts 2008; Ridgway, need to educate credit card users about responsible credit
Kukar-Kinney, and Monroe 2008; Roberts 1998; Wang and card use. Ideally, this education would occur when an indi-
Xiao 2009). vidual begins to use credit cards, but this is unlikely to be
The lack of significant direct and indirect effects with the case. To address this issue among the college student
respect to both self-esteem and risk-taking are somewhat population, financial management courses that include
puzzling in light of the prior theorizing and research dis- responsible credit card use are beginning to be offered at
cussed earlier. The lack of empirical support for hypotheses many colleges and universities. These courses, however,
entailing these variables and compulsive buying may ema- are usually electives. Universities should consider required
nate from differences between this study and others in the financial management courses or seminars for all incoming
conceptualization and measurement of compulsive buying. students that include credit card management. We would
That is, whereas this study conceptualized compulsive buy- go even further and advocate that financial literacy be man-
ing as a continuous variable and measured the construct via dated at the high school level. Although companies that
three indicators, other studies have conceptualized compul- issue credit cards might think that educating consumers on
sive buying as a dichotomous variable and measured the responsible credit card use is not their task and that it would
construct with a much larger set of items (see, e.g., Faber not be beneficial to them (i.e., credit card issuers make more
and O’Guinn 1988, 1989; Roberts 1998). Another reason for money when consumers misuse their credit cards), it is very
the failure to find support for study hypotheses may be that possible that companies that would undertake this effort
self-esteem and risk-taking were not operationalized at the could use this as a positioning strategy to attract consumers
necessary level of specificity relative to the prediction of who value a company that has the consumers’ best interests
credit card misuse and compulsive buying (i.e., trait mea- in mind. Parents, for example, who can be instrumental in
sures like self-esteem and risk-taking are couched in fairly assisting their college-age students obtain their first credit
general terms). Fisher (1980) asserted that an appropriate fit cards, can reasonably be expected to select an issuer that
between attitude measure specificity and behavioral criteria is proactive in educating and helping the new credit card
must exist to demonstrate strong predictability. In contrast, owner responsibly use the card. Thus, there needs to be
power-prestige is a specific, narrow construct (i.e., beliefs a concerted effort by academic and business institutions
about money) compared to self-esteem and risk-taking and to help young consumers develop responsible credit card
thus finding stronger links to specific related behaviors (i.e., behaviors.
credit card misuse, compulsive buying) was more probable While learning responsible credit card habits is certainly
at the outset. Last, it is possible that the lack of support important, the findings of this study also demonstrate the
for self-esteem and power-prestige emanates from the “file importance of linking individual difference variables to
drawer problem” (Rosenthal 1979; Scargle 2000)—it may managing personal debt. Our model and the results of this
simply be that prior studies failing to detect significant study suggest that young consumers need to broaden their
relationships were never published. perspective and first become aware of how they view money
and then how that attitude transcends to affect their use
IMPLICATIONS of credit cards. Indeed, the typical financial education and
awareness interventions may not be sufficient to overcome
The debt problems of U.S. college students mirror that of the well-established attitudes about money originating in child-
general U.S. population (Woolsey and Schultz 2010). Like hood. But there have been few efforts to change attitudes
92  Journal of Marketing Theory and Practice

toward money, and thus attitude change strategies might be nonbusiness students who might possibly differ from busi-
successful in this realm. Innovative financial management ness students with respect to the variables and, of course,
education should include information and awareness about differ from the general adult population. Replicating the
individual differences and desire for group membership study in countries outside the United States would also be
and their impact on credit card behaviors. interesting. Differences in cultural values, such as material-
Advertisers and marketing managers can use the findings ism or collectivism versus individualism (Hofstede 1980),
from this study to develop advertisements that promote might yield different results.
responsible use of credit cards. Typical advertisements use Potential limitations with respect to construct measure-
emotion to promote using credit cards to make purchases, ment should also be considered in future studies. Measuring
often for high-end products (e.g., “For everything else, credit card misuse with a Likert scale rather than an interval
there’s MasterCard”). The clear message to consumers is scale might have affected the statistical analysis. Research-
that their credit card gives them freedom to buy anything ers may also find it more useful to use actual credit card
they desire. These messages, however, might be contributing data, including things such as expenditures, card balances,
to the increasing tendency toward compulsive purchasing. late fees, and so forth, as indicators of credit card misuse,
Socially responsible companies would benefit by designing recognizing that participants may not be willing or able to
ads based on rational and responsible use of credit cards, share this information with accuracy. Similarly, although
especially those directed at young consumers who are just this study used subsets of indicators from previously es-
beginning to develop their credit card habits. As a starting tablished measures, there may be other indicators of the
point, such companies might consider how alcoholic bev- constructs that would improve the content and convergent
erage companies are addressing youthful and responsible validity. In particular, the reliabilities and average variances
consumption of their products. extracted for compulsive buying and power-prestige sug-
Although not directly suggested by the significant gest the convergent validity of these constructs could be
findings of this study, additional managerial implications improved (Fornell and Larcker 1981). This, in turn, might
should be considered to encourage responsible credit card affect the model fit.
use. For example, responsible credit card use may be facili- Future research needs to take up the issue of just how
tated by offering better deals when consumers pay with cash pervasive compulsive buying truly is in both college stu-
instead of credit cards. Setting relatively low credit limits dent and general adult populations. Our findings suggest
especially for college-aged consumers will help control the that college students are only emblematic of the debt
amount of credit card debt students accumulate. It would problem (i.e., it is reasonable to presume that these traits
also be helpful if the number of credit cards issued to col- and behaviors are represented in the general population as
lege students was limited. These and similar actions decrease well). Thus, one research strategy might be to design new
the financial risk associated with consumers who incur so measures that expressly approach compulsive buying as a
much debt that they cannot pay their credit card bills. more common behavior. Other variables that might affect
the model should also be considered. For example, perhaps
LIMITATIONS AND FUTURE credit card misuse is more likely when individuals are pur-
RESEARCH DIRECTIONS chasing products for special occasions or products with high
brand equity. An individual’s personal accountability for
There were a number of limitations associated with this his or her financial management would seem to be relevant
study that should be addressed in future research. First, to investigate. Despite the lack of significant findings with
like all cross-sectional studies, we cannot definitively dem- respect to self-esteem and risk-taking, we would encourage
onstrate our causal inferences. Longitudinal assessment is future researchers to continue to examine personality traits
needed to examine precisely how credit cards factor into that might be significantly linked to credit card misuse and
debt formation and compulsive buying. Another possible compulsive buying; exploring other literatures such as the
limitation entailed our sample, although this study was gambling and addiction literature might help in identify-
expressly conducted among college students because of ing relevant variables. However, researchers may want to
their demonstrated susceptibility to credit card misuse. adapt existing measures with general application, such as
Specifically, the findings in this paper are based on a sample self-esteem, to be more specific to financial management.
of business undergraduate students. Future research should Researchers also might find it useful to examine credit card
try to replicate the findings of this study with a sample of misuse and compulsive buying relative to personality or
 Winter 2011  93

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