CASE STUDY 1

DEMAND AND SUPPLY OF WII CONSOLE

QUESTIONS AND DISCUSSIONS:

1. Would the demand for the WII console is purely luxury good? The product gives comfort and
pleasure to the consumer which Fajardo (1995) classified this luxury good as elastic demand in
nature? State why?
 The demand for the Wii console is relatively elastic because it has close substitutes
which are the PlayStation 3 and Xbox 360 and consumers will tend to shift to others if
the price of Wii console increases or if it happens that there is no availability left for it
after its first hot lunch.
2. Would the supply for the Wii Console be relatively inelastic or relatively elastic? State why?
 The supply for the Wii console is relatively elastic because the quantity to be supplied
is determined through the price. Also in most markets, it is said that time period is
considered as determinant of the price elasticity of supply, and for Wii console, it is
elastic in the long run that’s also why there is a severe shortage of its supply because it
needs to be on over a longer period a firm can build or produce more and more to
make wii available to those who want to walk into a retail store and pick one up.
3. Draw the demand and supply curves as you have described them.
Figure 1. Demand and Supply Curve

D2 D D1 S
P

Pe
B A
Pe 1

4. Was the severe

 The severe shortage for over two years is simply a bad planning on Nintendo’s part for
if it’s an intentional scarcity, they would not initiate a price drop by 2009, instead make
its price higher with respond to the demand of the consumers who are eager to buy.
5.
 Nintendo dropped the price of Wii console in late 2009 to attract again more
consumers to increase their sales, for based on its shortage for 2 years, they might
have a big loss on sales because consumers shifted to Wii consoles’ close substitute
which are PlayStation 3 and Xbox 360. And for their revenues, there is an increase
again on it as consumers again bought the Wii console with a lower price back again on
its worldwide top-grossing product that caused for higher earnings.
 Case Study II

QUESTIONS and DISCUSSION

1. Assuming that the students are consumers availing of educational service, how will you
differentiate between the behaviours of the Group 1, Group 2 and Group 3 consumers? Hint:
Explain in terms of elasticity.
 There are differences of the behavior of every group of students toward the increase
of fee for their courses. Frist group one is most likely to stay and continue their study
even the fee will increase based on the text. This shows that the demand of students is
inelastic due to less responsiveness of the students to the hike of fee. However, the
group 2 and 3 shows more sensitive behavior in toward fee hike. It is safe to say that
they are under the elastic demand which an increase in fee means proportionately
decline in enrollees more than the percentage increase fee.
 Group 3= Decline in Enrollment = 1.2% =1.2 %
Hike of Fee 1%
 It shows that the elasticity of demand for enrollment is higher than 1 which means it is
elastic.
2. Explain the law of demand that the managerial economics students were talking about to stop
the fee hike.
 The managerial economic students explained the sense of law of demand by showing
the possibility of changing the number of enrollees if ever the fee will hike.
 A Demand Curve

Fee
Demand

E2 E1
The graph presents relationship of enrollees intends to enroll at a given fee. It shows the
decreasing number of enrollees due to increase fee.

3. Can you think of certain arguments in the case study which the college authority could pick up
to counter-argue with the students?
 I think the arguments in the case study which the college authority could pick
up to counter argue with the student is that the principal introduce that there
had to be a fee hike reduction in the UGC grant to prevent reduction of
facilities and faculty
4. If the Group 2 students (400 in number) are ‗neutral to the fee hike ‘and for every 5 percent
hike in fees 2 per cent students leave the Group 1 course (which has 400 students), find out
how much the revenue loss to the college will be with the proposed fee hike.

Schedule of Fee and Number of Students

Fee Group 2 Group 3 Revenues
500 400x500=200,000 400x500=200,000 Re 400,000
875 400x675=350,000 120x875=105,000 Re 455,000
 Based on the table, it shows that the total amount of revenues of the original fee (Re
500) is equivalent to Re 400,000. The expected 75% fee hike (Re 875) would only earn
Re 455,000) then there is Re 5,000 difference. Therefore, the total revenue loss to the
college is Re 5,000.

CASE III

Demand Function in the Indian Auto Industry

QUESTIONS FOR DISCUSSION

1. Discuss in detail the various determinants of demand for passenger cars in India.
 The determinants of the demand in Indian auto industries are the following: first is the
income level of citizens which was divided into non-urban, metro and urban area.
Secondly, the price sensitivity, brand consciousness and tastes of the consumers would
also affect the demand in car industry. Lastly, the effects of advertising could
encourage Indian consumers to buy their own car.
2. What role does non-urban India play in forming the demand in the auto-market?
 The non-urban in India composed of rich farmers, the plantation owners and the
absentee landlord. This market is more potential due to subsidies they receive from
the government which they can allocate some of their income to buy a car. However,
they can only afford the less expensive cars due to the road condition and their
preferences in buying such good.
3. Do you agree that the law of demand, technically speaking, cannot work in an auto-maker?
Justify your answer.
 Yes, because based on the text, the number one factor that should be considered in
analyzing the behavior of consumers is the level of the income. Car for many is luxury,
but for some it is need. Consumer should have to save a bigger portion of his/her
money in order to buy a certain car. If this is the case, then the law of demand must to
be applicable. However, consumer consumes other good (most of these are basic
goods) which he/she spend most his/her money. Hence, savings for buying car is
probably less no more.
4. Imagine that you are a new global auto maker planning to enter the Indian market. List the
various demand aspects you think are important. Prioritize them and explain for the
prioritization plan that you follow.
 If I were to be new global auto maker which I am planning to enter the Indian market, I
 would consider first the demand of the non-urban areas for a less-expensive car.

MICROECONOMICS ACTIVITIES

1. The demand for apples in a small town was 200 kg when the price was Rs 20 per kg. It
expanded to 250 kg. When the price was reduced to Rs 18 per kg. What is the elasticity of
demand for apples in the town?

Given:
Qdo=200 and Po=20
Qd1=250 and P1=18

Solution:
Qd1-Qdo/Qdo = 250-200/200 = 50/200 = _25_ = -2.5 or 2.5
P1-Po/Po 18-20/20 -2/20 -.1
 The elasticity of demand for apples in the town is equivalent to 2.5 which implies that
is elastic demand.

2. For each of the following equations, determine whether demand is elastic, inelastic or
unitary elastic at the given price:
a) Q = 100 – 4P and P = Rs 20
Q = 100 -4*20 = 20
Point Price Elasticity of Demand is given by the formula Ed= (P/Q)(∆Q/∆P)
∆Q/∆P is a derivative of the demand function, so it equals -4.
Ed = 20/20*(-4) = -4, so the demand is elastic.

b) Q = 1500 – 20P and P = Rs 5

Q = 1500 -20*5 = 1400
∆Q/∆P = -20
Ed = 5/1400*(-20) = -1/14, so the demand is inelastic.

c) P = 50 – 0.1Q and P = Rs 20
Q = 1500 -20*5 = 1400
∆Q/∆P = -20
Ed = 5/1400*(-20) = -1/14, so the demand is inelastic.

3. A consumer purchases 80 units of a commodity when its price is Rs 1 per unit and
purchases 48 units when its price rises to Rs 2 per unit. What is the price elasticity of demand
for the commodity?

Given:
 Qdo = 80 and Po = 1
Qd 1 = 48 and P1 = 2

Solution:
Qd1 – Qdo/ Qdo = 48-80/80 = -32/80 = -0.4 = -0.4or 0.4
P 1 -Po/Po 2-1/1 1/1 1
 The price elasticity of demand for the commodity is equivalent to 0.4. This means that
the is inelastic

4. The price elasticity of demand of colour TVs is estimated to be -2.5. If the price of colour TVs
is reduced by 20 percent how much percentage increase in the quantity of colour TVs sold to
do you expect?
Given:
Price Elasticity = 2.5
P = 20%
Qd =?

Solution:
Qd = Price Elasticity = Qd_ = 2.5 = Qd_ 5 = Qd =2.5 x 20 = .50% or 50%
P 20 % 1 20% 1
 Thus, in every P of color TV by 20%, it is expected the Qd by 50 %

5. Two goods have cross elasticity of demand equal to 1.2

Given:
EAB – 1.2 where A and B are the goods
a) Would you describe the two goods as substitutes or complements?
 Goods A and B are classified as substitute goods because they have positive
relationship.
b) If the price of one of the goods rises by 5 percent, what will happen to the demand for the other
good, holding other factors constant?
 If the price of good A will increase, the quality demanded for other good B will
increase.
6. After a careful statistical analysis, Tasty Burgers of Mumbai concludes that the demand
function for its burgers is Q = 500 – 3P + 2Pi + 0.1Y, where Q = Quantity demanded of its
burgers, P = Price of its burgers, Pi = Price of burgers of Jumbo Burgers (the closest rival of
Tasty Burgers), Y = Disposable income of consumers of Mumbai. In the Year 2009, P = Rs 10;
Pi = Rs 20; Y = Rs 6000
Answer:
a. ep = 0.027 b. cy = 0.027 c. = 0.0360
Solution:
Demand function for Tasty Burgers: Q=500 – 3P + 2P 1 + 0.1Y.

Q= quantity demanded of its burgers

P= Price of burgers
 P1= Price of burgers of Jumbo Burgers
Y= Disposal Income

 In the year 2006, P = Rs 10, P 1 = Rs 20, Y=6,000

 Therefore, in the year 2006 Q= 500-3(10) + 2(20) + 0.1 (6,000)
=500-30+40+600
= 1110
a) What is the price elasticity for the burgers of Tasty Burgers?

Price elasticity of demand= dQ/dP × P/Q

= -3 × 10/1110
= -0.027

b) What is the income elasticity for the burgers of Tasty Burgers?

Income elasticity of demand= dQ/Dy × Y/Q

= 0.1 × 6000/1110
= 0.5405

c) What is the cross elasticity of demand between the burgers of Tasty Burgers and
Jumbo Burgers

Cross elasticity of demand= dQ/dPi × Pi/Q

= 2 × 20/1110
= 0.0360

7. There are 1,000 identical individuals in the market for commodity X given by Qdx = 12,000 –
2,000PX, ceteris paribus and 100 identical producers of commodity X, each with a function
given by QSX = 2,000PX, ceteris paribus.

I. Find the equilibrium price and quantity

Given:
Qdx = 12,000 – 2,000 Px
Qsx = 2,2000 Px

Solution:
Qdx = 12,000 – 12,000 Px = 2,000 Px
12,000 = 2,000 Px + 2,000 Px
12,000 = 4,000 Px
12,000 = 4,000 Px
4,000 4,000
3= Px
 Qdx = 12,000 -2,000Px
12,000 – 2,000 (3)
12,000 – 6,000
6,000

II. If there is an increase in consumer ‘s income QdX = 14,000 – 2,000PX, derive the new
market demand schedule and state the new equilibrium price and quantity.
Given:
Qdx = 14,000 – 2,000Px
Qsx = 2,000Px
Solution:
Qdx =14,000 – 2,000Px = 2,000Px
14,000 = 2,000Px + 2,000Px
14,000 = 4,000Px
14,000 = 4,000Px
4,000 4,000
3.5 Px
Qsx = 14,000 -2,000Px
14,000 – 2,000 (3.5)
14,000 – 7,000
7,000
III. Suppose there is an improvement in the technology of producing commodity, the
new market function is QSX = 4,000 + 2,000PX. derive the new market schedule and state
the new equilibrium price and quantity.
Given:
Qdx = 14,000 – 2,000Px
Qsx = 4,000 + 2,000Px
Solution:
Qdx = 14,000 – 2,000 Px = 4,000 + 2,000Px
14,000 – 4,000 = 2,000 Px + 2,000Px
8,000 = 4,000Px
8,000 = 4,000Px
4,000 4,000
2=Px
8. Colgate sells its standard size toothpaste for Rs 25. Its sales have been on an average 8000 units per
month over the last year. Recently its close competitor Pepsodent reduced the price of its same
standard size toothpaste from Rs 35 to Rs 30. As a result, Colgate sales declined by 1500 units per
month.

I. Calculate the cross elasticity between the two products.

Given:
DAO = 8,000
DA1 = 1,500
PBO = Rs 35
 PB1 = Rs 30
Solution:
EAB = % DA = 1,500 -8,000 / 8,000 =-.8125_= 5.69
EAB = % PB 30-35/35 -.14286
II. What does your estimate indicate about the relationship between the two?
 The computed EAB = 5.69 hence, the demand is elastic and the two products are
considered substitute goods.
9. A consumer spends all his income on two goods X and Y. If a 50-p.c. increase in the
price of good X doesn ‘t changes the amount consumed of good Y, what is the price
elasticity demand for good X?
 The price elasticity demand for good X and Y is perfectly inelastic because the change
in price has no effect on demand at all. The demand good Y is still remained
constant.
10. Vijay Dairy is selling flavoured milk and buttermilk in packets of 150 ml. The dairy sells 2000
packets of flavoured milk and 1000 packets of buttermilk everyday. The former is priced at
Rs 6 and the latter at Rs 4. A market survey estimates the cross-price elasticity (both ways)
to be +1.8, and the own price elasticity of flavoured milk to be -1.3. The dairy is
contemplating a 10% reduction in the price of flavoured milk. Should it go ahead with the
price reduction? Show your working solutions
Given:
EAB = +1.8
PDA = -1.3 or 1.3
 Flavored milk and buttermilk are considered substitute goods and tend to be elastic.
The flavored milk must deduct its price due to the presence of closed substitute good,
the buttermilk. This move will increase the quantity demanded for flavored milk and
people will buy more of this good than the buttermilk.
 Consumer Behavior Among Filipinos: A Quantitative Study About Vanity,
Materialism, and Gender
Differences

Chapter I
The Problem and Its Background

Rationale

With the change brought by innovation and economic progress to the world, people around

the globe have shifted their spending behaviors from functional to materialistic and aesthetic

purposes. Driven by his behavior, vanity became an area of study for numerous researches, made

popular as a predictor of a person’s materialism (Chang et al., 2011). Choosing vanity goods over

spending for functionalism can be seen as problematic given the economic status of the majority of

Filipinos. The lack of information about the consumer behavior of the Filipinos, specifically about the

matters of vanity and materialism, influenced the realization of the paper.

Modernization of civilizations created innovations that has greatly increased the quality of life

compared to the age of hunters and nomads. Far from the old ways of life, society now has access, not

only to needs, but also wants; faster and easier than perilously scouring in forests. Basic needs have

become so accessible nowadays that people look for ore value from the goods they acquire. From

gathering for quantity, utility, function and necessity – consumption for mere survival—society now

has a culture of spending for more than just utility. Be it for sensory or symbolic desires, these and

other factors which play a great role in today’s consumerist society. Encouraged by advertising and

mass media, extra-utilitarian factors have contributed to building a culture where happiness and

success is measurable by material achievement. This largely observable behavior has been defined by

Wang & Walter (2006) s consumer vanity: the underlying consumer value orientation wherein
consumer spend more for aesthetics than for function or need. Personal preference scales

substantially in decision-making for consumers. The global market has been segmented into different

groups, labeled by their preferences, guiding, producers on how to sell their consumers.

Statement of the Problems

The purpose of this study was to see how consumer behavior of Filipinos compare to previous

studies. It seeks to see if anxiety can serve as a mediator to help explain the relationship between

consumer vanity and materialism. It also seeks to test if the differences in gender with regards to

materialism and consumer vanity would differ from existing findings This study which was mainly

intended to find the answers to the following hypothesis:

1) Consumer vanity is positively related to anxiety.

2) consumer vanity and materialism are positively related.

3) Anxiety is positively related to materialism,

4) The relationship between consumer vanity and materialism is mediated by anxiety,

5) There is no difference in consumer vanity and materialism between Filipino males and Females.

Substantially, the results were found to be coherent with the hypotheses, showing evidence of

a significant relationship of vanity and anxiety with materialism independently, and showing no

significant differences among the genders with regards to materialism and vanity. However, the data

failed to show evidence that supports anxiety as a mediator between vanity and materialism. The

study intends to add on the existing consumer behavior research, specifically to aid in advertising that

targets the Filipino demographic, by providing significant information on Filipino consumer behavior

and to take advantage of the rising metrosexuality in the Philippines. This study aims to substantiate

the manifestations of consumer vanity and its relation to materialism and whether anxiety can be seen
as an explanation of the relationship.

Conceptual Framework

The researchers hypothesize that, though past studies show consumer vanity having a

Anxiety

significant effect on materialism, said effect may be further elaborated and clarified when we include

Materialism
Vanity

anxiety using the mediation model. The researchers also hypothesize that there is a little to no

difference in consumer vanity and materialism between the two genders specifically among Filipinos.

Significance of the Study

Aesthetic appeal and symbolic has always had value in the Philippines. Evident with the

practices during the pre-colonial times, ethnic embroidery, and weaving have always involved laviss

and symbolical patterns. This culture carries on today, showing itself in how products are portrayed

here in the Philippines. Advertising drives consumption, and the mass media scene continues to be

one that heavily involves appeals to personal preferences. Continuing with a consumption behavior

largely influenced by impulses depending on sensory appeal, the Filipino demographic has become

more alike in spending behavior with more progressed western nations, than its neighboring countries

and other nations with similar economical and progressive status.

Given the recent rise of globalization numerous consumer behavior research have been made.
However, there is currently little to no research about Filipinos and this paper aims to bridge that gap.

Addressing the relationship between the consumer vanity, anxiety, and materialism among Filipinos

could aid in supporting the already existing consumer behavior theories. While most existing studies

specify that females are more susceptible to consumer vanity and materialism, this paper seek to show

that given the recent rise of metrosexuality in the Philippines, the data would differ by showing more

equal results between the two genders.

The researchers believe it is important to have studies more grounded in the Filipino context,

as there is currently a scarcity of research regarding local consumer behavior. If the results of this

research show similar trends to past literature, in could aid in strengthening the already existing

consumer behavior theories. If different results are obtained, it could highlight the limitations of

related publications.

Lastly, as of now, there is yet to be any research that studies the relationship between the

three factors, namely: anxiety, consumer vanity, and materialism, especially using anxiety as a

mediation, and the difference it may have in both the Philippine context, and in the different gender

demographics

Chapter II

Review of Related Literature

In the middle ages, resources from other countries were usually attained by the use of swords

of the more powerful countries. After the enlightenment period, these power countries realized that

trading with resource rich countries not only took less time, but less gold as well. The past four

centuries saw more and more countries open up their economies which resulted in the rise of a new

class form: the bourgeoisie, or middle class. The nouveau rich middle class, which was mostly made up
of traders and merchants, gained power in numbers to go against the highly exclusive autocratic ruling

and pushed for more rights that started the spark of democracy (Acemoglu & Robinson, 2012). The

rise of bourgeoisie and democracy also aided in a decline in violence since citizens were less interested

in participating in wars and preferred to spend their time making money (Pinker, 2011)

That, along with the industrial revolution, has fast-forwarded us to the present where swords

and war ships have been replaced with individualism and hedonism. Society gained an obsession

driven by money as it permitted extravagances and signified prestige. Money, now more available to

be acquired by the masses, has made it easier to focus on one’s image and social status by obtaining

materialistic goods that would appeal to sensory and symbolic desires instead of the usual basic

necessities (Wang & Weller,2006). Now, instead of being influenced by utilitarian and functional

needs, people’s purchasing behavior is influenced by advertisements that puts an emphasis on vanity

and materialistic pleasure (Chang et al.,2011)

The Role of Advertising

Advertising has helped increase consumer culture by portraying physical attractiveness and

material goods as a gateway to happiness and success. Advertising is defined as a promotional

marketing strategy companies use to create awareness about their products and services with the goal

being to generate a response from the target audience (Mogire & Oloko, 2014). Originating from the

West, mass media, along with advertising, have played a major role in the creation, learning, and

sharing of these consumer habits with Lasch (1978; 1984) stating that various studies have shown that

advertising is one of the most powerful media to “manipulate” while Bandura’s (1987) social learning

theory states that, with behavior coming from family, peers, and mass media that has greatest

influence. The genius of manipulative advertising relies on creating a false consciousness and praising

self-expression through vanity and materialism (Abela, 2006; Durvasula & Lyonski, 2008).
 While choosing which products to buy, consumers’ decisions vary between the types and the

adjustments advertisers do to reflect this (Peter & Olson, 1999). Multiple research has found the most

effective ways to advertise specific products to different demographics including rational vs emotional,

local vs global appeal, and functional vs experiential in both low and high -GDP countries react better

to experiential ads (Zarantonello, Schmitt, & Jedidi, 2014).

One of the low-GDP countries ( Zarantonello, Schmitt, & Jedidi, 2014) and although it stated

that compared to emotional and experimental, a study saw that certain products gained high

involvement with emotional commercials, specifically vanity products (eg; hair coloring, perfume, facial

soap, jewelry, fashion apparel, and cosmetic) (Agatep-Valmoria, 2007). Previous research has found

vanity as a useful marketing strategy to promote many products and services such as cosmetics,

clothing, and body treatment (Solomon, 1985, 1992) by emphasizing an elevated social status and an

increase in an individual charm (Chang et. Al, 2011). And it paid off. Ajay Shingh Kapur, equity

strategist of Bank of America Merrill Lynch, stated in 2015 that the vanity industry was worth $3.7

trillion, about the size of the fourth largest economy in the world, Germany, and the market was

projected to grow to $4.5 trillion by 2018 (Tahara-Stubbs, 2015).

The Rise of Materialism

Materialism can be defined in many ways, but mainly as a devotion towards obtaining and

spending on earthly needs and material desires (Durvasula & Lyonski, 2010). Chang et al. (2011) added

that materialism is a belief wherein happiness is gained through material satisfaction, and that the

latter is composed of three components: acquisition centrality, acquisition happiness and possession

defined success. Furthermore, materialism is seen as the cause of overspending and compulsive

shopping which led to a shift in consumer culture. With more countries taking part in the globalization

era, the desires for modernity have resulted in the embracing of more western values that are
associated with materialism and has led to cultures of excessive consumerism and marketing (Mad et

al., 2011).

Vanity

Vanity, a human quality that is swayed by social pressure, can be defined with two domains:

physical vanity and achievement vanity. This can be devided even further into four sub parts: concern

for physical appearance, positive view of physical appearance, concern for achievement, and positive

view of achievement (Netemeyer et al, 1995). There are mainly two philosophies about vanity. The

first states that vanity is derived by primary and biogenic needs and is affected by parental socialization

and genes (Durvassula, Lyonski, & Watson, 2001). At the other end, the second philosophy suggests

that vanity is a second trait mainly influenced by the environment and socio-economic conditions

(Mason, 1981).

Materialism and Consumer Vanity

There is strong positive relationship between consumer vanity and materialism (Netmeyer et

al., 1995; Chang, 1999). Pursuing brand name goods and expecting praise reveal that consumers use

possessions as a symbol of one’s personal success. If this also applies to Filipinos, it suggests that those

who give high importance to physical appearance and personal achievement would also score high

materialism.

H1: Consumer vanity and materialism are positively related.

Anxiety as a Mediator

With giving importance to material wealth as a symbol of success, studies have found another

trait with close relationships to both vanity and materialism: anxiety. Defined as the subjective

discomfort state that consists of worry, shame, fear, or shyness, anxiety has been linked nervousness

and uneasiness (Izard et al, 1984: Chang, 1999) is also one of the negative emotions that can make an

individual more susceptible to addictive buying (Faber & Christenson, 1996)

Anxiety and consumer vanity

Placing high importance in one’s looks and showing off success by materialistic possessions can

cause internal anxiety due to trends constantly changing which, in order not fall behind, will

continuously be pursued (Yang,2001). According to social learning theory, those who care about how

others view their physical appearance will spend time on it but, if they lack the money to purchase the

products, it will consequently lead to money anxiety (Netemeyer er al., 1995; Chang et al, 2011). With

that being said, the study proposes that:

H2: Consumer vanity is positively related to anxiety.

Anxiety and materialism

High consumer vanity results in negative attitudes, high anxiety, and frustration, as those

people believe that material possessions will give the satisfaction and beauty, thus finding themselves

chasing the constant changing fashion trends (Richins and Dawson, 1992; Chang et.al, 2011). This

interpersonal anxiety in materialists who see acquisitions as a symbol of happiness success leads to

them stuck in a cycle of long-term purchasing decisions influenced by those around them (Magkosa &

Mohube, 2007) which leads to the hypothesis that:

H3: Anxiety is positively related to materialism.

 With that being said, it could infer that the effect of consumer vanity to materialism can best

be explained by the anxiety or:

H4: The relationship between consumer vanity and materialism is mediated by anxiety.

Difference Between Genders

Previous studies have found that women were more prone to consumer vanity thus leading to

them being highly susceptible to materialism compared to men (Wu 1997). Women’s preoccupation

with physical appearance involves the use of clothes and cosmetics to emphasize their physical

tributes, which causes them to spend more money buying expensive goods to demonstrate their status

(Chui & Sidin 2011). While men may buy a 3-in-1-shower product, women, who pay more attention to

physical appearance, may prefer numerous products targeting specific areas (Chang et. al, 2011).

However, the 21st century saw the rise of metropolitan young males showing great interest in men’s

fashion, cosmetic products, and personal care due to changes in lifestyle, employment, feminism, and

gay movements (Lee, 2004). Choosing to showcase their identity, power, success, and value by

spending good money in their physical appearance, metrosexual men may help in minimizing the gap

between males and females in terms of materialism (Pan & Jamnia 2015)

Metrosexuality in the Philippines

The Philippines has also seen an increase in metrosexuality. Synovate Inc’s 2004 study found

that 58% of the Filipino men surveyed said that looking good was “very important” to them whereas

48% felt that they were “sexually attractive”. Metrosexuality, usually referring to urban males, have

found its way to provinces such as Rizal where fishermen admitted to wearing custom – made mask to

protect their faces, when asked for their reason, one answered “para proteksiyon sa lamok, init ng raw-

pag makas ang hangin mangingitim agad kami. Parang pogi pa rin” (Bautista 2013)
 With vanity products being marketed to Filipinos by the use of emotional advertisements that

trigger the consumers’ need to increase their social value, and with the Philippines seeing a recent

increase in metrosexuals, it is possible to aassume that the discrepancy between the consumer vanity

and materialism in males and females will not be significantly different, diverging from the results of

previous studies (Chang t al., 2011; Chui & Sidi, 2011; Wang & walter,2006):

H5: There is no difference in consumer vanity and materialism between Filipino males and

females

Chapter III

Methodology
Respondent of the Study

Using convenience sampling, a sample of 215 Filipinos aged 15-40+ answered an online survey.

The survey, entitled “Spending Habits of Filipinos” masked the true nature of the study. A small

description indicating the confidentiality of their answers was placed at the beginning as well as a

question asking for their consent in agreeing to participate in the study. The validation check questions

eliminated 15 participants which brought down the total number of valid data to 200 respondents

consisting of 103 males and 97 females.

Measure

The research method followed a quantitative design and the 61-item survey included basic

demographic questions, three validation check questions, and three scales: vanity, materialism, and

general anxiety. The validation check questions asked the participant to choose a specific choice to see

if they were paying attention to the questions thus ensuring that the data, they submitted was viable.

The scale of vanity traits was based on the vanity scale of Netemeyer et al. (1995), a 7-point

Likert scale (1 = strongly disagree and 7 = strongly agree), which included questions on one’s view of

physical appearance as well as their view on achievement. The scale consisted of four distinct yet

related concepts of vanity: 5 items regarding physical-concern (i.e.: the way I look is extremely

important to me), 6 regarding physical-view (i.e.: my looks are very appealing to others), 5 regarding

achievement-concern (i.e.: professional achievements are an obsession to me), and 5 regarding

achievement-view(i.e.: l am good example of professional success), totaling the number of items to

21.9

Materialism was based on Richins and Dawson’s (1992) Material Value Scale (MVS), a 5-

p0intLikert scale (1 = strongly disagree and 5 = strongly agree) consisting of 18 questions about

acquisition centrality (i.e.: I like to own things that impress people), acquisition as the pursuit of
happiness (i.e.: I’d be happier if I could afford to buy more things),and possession-defined success (i.e.:

some of the most important achievements in life include acquiring material possessions).

Lastly, the Hospital Anxiety and Depression Scale (HADS) was used to measure anxiety. The

HADS (Zigmond and Snaith, 1983) is a 14- item questionnaire used to determine anxiety and

depression. The 7 items that measured anxiety, which follow a a-point Likert scale (0 = not at all and 3

= often), were added to the survey and asked respondents to rate statements such as “I feel tense or

wound up” and “worrying thoughts go through my mind”

Procedures

The researchers began with creating the survey in Google Forms and the proceeded to obtain

participants online by the following methods: personally, messaging known acquaintances to answer

the survey, asking associates to share the survey to others, and posting the link of the survey on

Facebook and Reddit. The participants were informed that it would take no more than fifteen minutes

to answer and all questions were to be kept confidential and used for academic purposes only. A short

thank you message was shown at the end of the survey upon completion.

Analysis

After obtaining the necessary number of respondents, the data was organized using Microsoft

Excel. Participants who failed to answer the validation items were excluded and the remaining data

was further analyzed in SPSS in order to derive the descriptive statistics, Cronbach’s alpha, and be

subjected to mediation analysis and t-test.

Discussion

The purpose of this study was to see if the results obtained could bridge the gap in literature

pertaining to the lack of consumer behavior research in the Philippines. Using previous findings as a
basis, the researchers hypothesized that vanity and materialism would have a significant relationship

among Filipinos. The results were consistent with the related literature and showed that

Filipinos who gave high importance to physical appearance and personal achievement also scored high

in materialism. Also fitting with previous journal articles was the existing consumer behavior theories

tested in other countries were also applicable to the Filipinos.

The data, however, failed to show a significant relationship between consumer vanity and

anxiety, contrary to other journals. The data also failed to show anxiety as a mediator between

consumer vanity and materialism, suggesting that it did not directly contribute to explaining the

variance between the two, specifically amongst Filipinos. Given that there were no existing studies

that directly supported anxiety as mediator between materialism and consumer vanity, the results

should be interpreted with caution as it is possible that a better designed study could have given more

definitive results.

Another result that differed from previous findings was that there were no significant

differences between males and females when it came to materialism and vanity, supporting the

hypothesis of the researchers. This lack of difference, however, cannot be used as an interpretation

that it was specifically due to metrosexuality. Although some studies and news articles do indicate that

there is an abundance of metrosexuals in the Philippines (Bautista ,2014), it is insufficient to b used as

a definite conclusion. Given that the males and females have similar levels of vanity and materialism,

commercial and market interests can take advantage of this and broaden their range of male products

to target specific needs.

Limitations of the Study

Given that the data is obtained by convenience sampling, as well as being limited to 200

respondents, the results obtained were insufficient to be used as a general indicator of the Filipino
population. The majority of the respondents were similar age (49% being 21-25 years old), civil status

(92% being single), and monthly individual income (49.5%earning less than 15,000), which may have

affected the validity of the data. Also failing to add a scale to measure the metrosexuality of the

respondents, the data cannot be deemed reliable as showing that metrosexuality was the reason for

the lack of significant differences between genders in terms of vanity and materialism.

As mention above, no existing research found by the researchers directly supported the

hypothesis that anxiety was a mediator between materialism and anxiety. The design of the study,

such as the particular scales used, could also be a factor regarding the validity of the data.

Conclusion

the study, despite the limitations, was able to come up with the following results: 1) vanity has

a significant effect on materialism. 2) anxiety fails to mediate between consumer vanity and

materialism, although showing a significant relationship with materialism alone, and 3) there is no

significant differences between the scores of Filipino males and females regarding consumer vanity and

materialism, showing evidence that both genders in the Philippines have similar spending behavior.

Having determined these statements, it can be deducted that Filipino spending behavior and

materialism is influenced with vanity on males and females alike. This phenomenon may be caused by

the large influence of western culture brought by the period of western colonialization and the rising

globalization (Frith & Frith, 1990). Furthermore, findings about the lack of significant difference on

spending behavior (materialism and consumer vanity) among genders show great opportunities on the

male vanity products market on behalf of companies.

These phenomena however, could also be caused by how advertising and media influenced the

thoughts of the Filipino consumers similarly on how he studies Bandura (1978),Lasch (1978; 1984),

Abela (2006) and Durvasula & Lyonski (2008) describe advertising as the most powerful way to
influence the consuming behavior of the masses. The high focus on vanity and the wide-variety of

male vanity products in the Philippines could have shaped the overall behavior of Filipinos towards the

consumption of goods.

Finally, the research shows consistency with results of Cheng et al. (2011), was based in Taiwan

the researchers of the past study however used different scales and measured fashion anxiety, instead

of general anxiety. Despite of this differences, it can be seen consistency that the anxiety variable of

both studies fails to mediate, specifically by showing no relation with consumer vanity, and that in both

studies alike materialism shows significant effect to the other two variables. These consistencies can

be grounds of evidences that Filipinos have similar consumer habits as Taiwan, however more research

is recommended to confirm this statement.

Recommendations

Future research should consider either attaining a broader sample to better reflect the Filipino

population or re-examine related literature and focus on more specific pools (such as with regards to

age or monthly individual income). Different scales may also be used to measure anxiety, materialism,

and vanity, to determine the possibility of anxiety mediating the two if the design were altered. Future

research could further study the lack of differences between genders regarding vanity and materialism.

It would be interesting to see if increasing the sample size would obtain similar results and, if it does,

what reasons could be used as an explanation

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1. types of investment which I choose to invest are:
1. Commodities:
 GOLD

2. Major Currencies like:

 EURCHF
 USDJPY
 EURJPY

3. Indices like:
 SPX500
 JPN225
 FRA40
  DJ30

4. Cryto Coin like:

 ETHEREUM

2. The reasons why I invest in those types of investment is that first, in commodities just like gold. Gold
is one of the most widely followed metals and commodities, and it’s seen as a safe haven during times
of uncertainty. Although gold prices could experience a high degree of volatility due to its inherent risk
factors, the precious metal has been thought to be a stable and a safe been thought to be a stable and
safe investment over a long term. Major currencies investment will also help to balance my portfolio.
In investing SPX500, JPN225, FRA40 and DJ30, they are the leading indices usually used as a benchmark
for the overall market daily performance. And the last is Crypto Coins. I’ll assume Ethereum is one of
the coins most interested in throwing money in to it. Because base on my analysis and reading it is the
second largest Crypto Coins and proved to be an amazing investment over the years.

3. Predictive analytical is the data I used in making my decisions to invest in those type of investments.

4. Yes, I think I made the right decisions because almost all of my investment is gaining a profit.

5. If I have I real funds for investment I will invest it in Real Estate. Real Estate investing aims for the
generation of income or profit through purchasing, leasing, managing or selling a piece of realty
property for a higher price than it was acquired (when the property’s value appreciates over time).
Real estate is generally a great investment option. It can generate on going passive income and can be
a good long term-term investment if the value increases over time. And in investing Real Estate it can
be reasonably safe and it can be very profitable.

6. I have learned to be a more careful in investing my money, although it is a game i have to consider
everything whether i gain or loss a profit in investing my money. I struggle a lot in this game especially
when i think which is the best way to invest my money in order for me to gain a profit. So risky at all.
 ADVANCE ECONOMICS
SS206

Submitted to:

EXEQUIEL M. PEREZ
Professor

Submitted by:

Arceli Valenton

December 15, 2019