Shrinking budget? Consumers choose less variety when investing or shopping

When consumer budgets grow or shrink, how do spending habits change? A common view is that people with a budget will spend their money on the same number of products, even when their previous budget was lower or higher. But in order to keep their favorite items, consumers whose budgets have shrunk to a particular amount will opt for less variety than someone whose budget has increased to that same amount, according to a new study in the Journal of Marketing Research. Investors beware!

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