A recent study conducted by a research team around Hilke Plassmann, the INSEAD Chaired Professor of Decision Neuroscience & Brain and Spine Institute (ICM – Inserm/CNRS/Sorbonne Université), a principal investigator in the Social Affective Neuroscience Team at the ICM, David Dubois, Associate Professor of Marketing at INSEAD and Gideon Nave, Assistant Professor of Marketing at The Wharton School & the Wharton Neuroscience Initiative shows that testosterone, the male sex hormone, increased men’s preference for status goods compared to goods of similar perceived quality but seen as lower in status.
The paper and its findings are published in Nature Communications. The research reveals that consumption of status goods (e.g., luxury products or experiences) is partly driven by biological motives. The results are the first to demonstrate that testosterone causally influences rank-related consumer preferences and that the effect is driven by consumers’ aspiration to gain status rather than power or a general inclination for high-quality goods.
Other researchers include Amos Nadler of Ivey Business School, David Zava of ZRT laboratories, and Colin Camerer of California Institute of Technology. The team investigated whether and when consumers’ desire for status goods is biologically rooted with a focus on the effect of testosterone on men’s desire for goods conveying status benefits such as luxury products. Basic research shows there is a fundamental need to signal one’s rank across species. Higher social rank brings individuals several significant advantages such as mating opportunities or access to resources or social influence. In human society, individuals often show their rank in the social hierarchy through economic consumption, in particular through possessing and displaying expensive, luxury brands. To what extent is consumers’ preference for such goods biologically motivated?
“In the non-human species literature, some evidence highlights the link between testosterone and rank-related behavior. In humans, testosterone levels can situationally increase in contexts related to social rank, during competitions and after winning them or in the presence of an attractive mate,” says Hilke Plassmann.
To gain more insights into the role of testosterone on social rank and status associated behavior, a study was conducted involving 243 men of similar age and socio-economic background. Randomly, half of them received a single dose of testosterone that mimicked a testosterone spike that could occur in an everyday situation causing an increased testosterone level; the other half received a placebo treatment. All subjects then participated in two tasks.
In the first one, they were asked to choose between pairs of brands. The pairs were composed of brands that were all pretested to have polarised social rank associations but did not differ in perceived quality. That is, one brand was seen to lift its owner much higher in the social hierarchy (e.g., Calvin Klein) than the other (e.g., Levi’s). For each pair, participants were asked “which brand do you prefer and to what extent?”, on a 10-point scale anchored with each brand. The findings reveal that men who received the testosterone doses showed a higher preference for the status (positional) goods associated with higher social rank (such as a luxury brand). This suggests a causal link between testosterone and rank-related consumer preferences.
The second task meant to investigate the effect of testosterone on the two distinct routes to high social rank – status and power. While status refers to the respect in the eyes of others, power comes from one’s control of a valued resource. The research team used six different product categories from coffee machines to luxury cars and created three different framings for each product category, with a similar wording but emphasizing the target product in terms of its status benefits, power benefits or high quality.
For example, the mock ads variously described a Mont Blanc pen as “the internationally recognized symbol among the influential” (status), “mightier than the sword” (power) “an instrument of persistence and durability” (quality), says David Dubois.
The researchers then asked participants how much they liked the product description and the product itself. Here testosterone did not increase liking when the product was perceived as a quality product or a power-enhancing one but only when it was described as conveying status. These results establish a causal link between testosterone and increase of preference for status-enhancing goods.
The findings may be useful for generating new hypotheses regarding contexts where positional (status) consumption occurs. As men experience the situational elevation in testosterone during and following competitions such as sporting events or in the presence of attractive mates, male consumers may be more likely to engage in status consumption and find status-related communications more appealing at certain times.
According to Gideon Nave, “While the study shows that consumption of positional goods is partly driven by biological motives, it is important not to forget that cultural differences might play a role in the biological underpinnings of status behavior and that status signals are not universal. These results bring the first theoretical insights into the biological basis of preference for high-status goods that need to be replicated and generalized in other populations.”
The findings also have broad implications for luxury brands and policymakers alike.
“I’ve always been struck by the variations in consumers’ appetite for luxury, with some markets or periods encouraging a “luxury fever” (e.g., urban areas, fast-developing markets such as China etc.) and others less so. Our findings are exciting because they show that consumers’ drive for luxury may stem directly from differences in testosterone levels varying with the amount of social competition, population density, or male/female imbalance,” says Amos Nadler.