An analysis of the relationship between risk perceptions and willingness‐to‐pay for commodities during the COVID‐19 pandemic

• Published date: 01 March 2022
• Author: Ou Li,Da Qian
• Date: 01 March 2022
• DOI: http://doi.org/10.1111/joca.12407

SPECIAL ISSUE

An analysis of the relationship between risk

perceptions and willingness-to-pay for

commodities during the COVID-19 pandemic

Ou Li

1,2

| Da Qian

3

1

Alibaba Business School, Hangzhou

Normal University, Hangzhou, China

2

Neuromanagement Laboratory, Zhejiang

University, Hangzhou, China

3

Department of Business Administration,

College of Economics and Management,

Zhejiang Normal University, Jinhua,

China

Correspondence

Da Qian, Department of Business

Administration, College of Economics

and Management, Zhejiang Normal

University, Jinhua, China.

Email: qd@zjnu.cn

Abstract

The novel coronavirus disease of 2019 (COVID-19) has

had a significant impact on the global retail market.

Nonetheless, consumers will eventually return to the

market once the pandemic is effectively controlled.

Therefore, it is critical to consider which features

closely linked to COVID-19 may affect consumer

behavior. The present study thus addresses this gap by

investigating the relationship of risk perceptions

regarding COVID-19 with an important component

of consumer behavior—namely, willingness-to-pay

(WTP)—and further explores the underlying mecha-

nisms behind this relationship. Data collected from

480 Chinese participants were analyzed using struc-

tural equation modeling. Results showed that those

with a greater risk perception regarding COVID-19

were more likely to exhibit a higher WTP for various

commodities, which can be driven by awe and

perceived loss of control induced by COVID-19. The

present study delineates the effect that public health

emergencies have on the consumption intentions of

the general public.

KEYWORDS

awe, COVID-19, perceived loss of control, risk perceptions,

willingness-to-pay

Received: 10 August 2020 Revised: 6 August 2021 Accepted: 21 August 2021

DOI: 10.1111/joca.12407

© 2021 American Council on Consumer Interests.

J Consum Aff. 2022;56:257–275. wileyonlinelibrary.com/journal/joca 257

1|INTRODUCTION

The outbreak of coronavirus disease of 2019 (COVID-19) as a public health emergency had a

remarkable impact on the global consumer market, largely due to the lockdown and social distanc-

ing policies implemented by governments throughout the pandemic (Roggeveen &

Sethuraman, 2020). At present, consumption of the residents around the world is severely affected

by COVID-19, making them to improvise and learn new habits to cope with “COVID-

19-disrupted”life (Sheth, 2020). Hence, the urgency of exploring the relationship between COVID-

19 and consumption has emerged.

The development cycle of the epidemic in countries around the world roughly includes

three phases: (1) the initial outbreak, (2) the rapid deterioration, and (3) the “new normal”and

stable development. The household consumption will first be negatively affected by external

events and then recover after these events stabilize. In particular, consumers will eventually

return to the market when the outbreak is over and restoring consumption level to match the

one before the outbreak. Therefore, in the context of COVID-19, especially as COVID-19 enters

its “new normal”phase, it would be particularly meaningful to study how characteristics closely

associated with COVID-19 affect people's willingness of consumption, and the mechanisms by

which this effect occurs. Nevertheless, little scholarly attention has been paid to explore this

important research question. COVID-19 is widely considered to be a significant risk event to

the public due to its harmfulness and uncertainty (Dryhurst et al., 2020; Li & Zhao, 2021).

Therefore, risk is the most prominent feature of COVID-19. Given the important value to

address the relationship between the main feature of COVID-19 and downstream consumption,

this paper aims to examine how individuals' risk perception of COVID-19 affects their

willingness-to-pay (WTP). We draw on awe (Keltner & Haidt, 2003) and perceived loss of con-

trol (Landau et al., 2015) to conceptualize the effect of COVID-19 on individual's WTP for

commodities.

The present study aims to make three contributions. First, we have contributed to and enriched

the current literatures on COVID-19 in the domain of social sciences. Under the current crisis, it is

essential to understand the relationship between the perception of core features of COVID-19

(i.e., risk perceptions) and consumer behaviors. In this regard, we offer a more comprehensive

understanding of the effects of risk perceptions on WTP for commodities by exploring the medi-

ated role of awe and perceived loss of control, which would provide important practical implica-

tions for retailers and policymakers to cope with the negative impacts induced by COVID-19.

Second, we have extended the literature stream of awe, specifically, the antecedents and the down-

stream effect of awe in consumption scenarios. On the one hand, we applied awe to the risk

domain, and uncovered a unique upstream variable (i.e., risk perceptions) that affects awe. This

complemented existing theories suggesting that awe is commonly induced by viewing magnificent

natural landscapes or artworks, or experiencing natural hazards by illuminating that the risk per-

ceptions of social risky event may also trigger individuals' sense of awe. On the other hand, we set

outaninitialexplorationontherelationshipbetween awe and a classic downstream variable of

consumption (i.e., WTP), and found that although awe does not directly affect WTP, it can induce

perceived loss of control and indirectly increase WTP through the control compensation mecha-

nism. Finally, we have contributed to the literature stream of risk perceptions by identifying two

psychological variables of awe and perceived loss of control which are affected by risk perceptions.

The present study was conducted with a Chinese sample. At the time of this study (April

2020), the spread of COVID-19 in China has been largely controlled, the order in all aspects of

society has been gradually restored, and residents' consumption has also begun to recover

258 LI AND QIAN