Motivations of Luxury Consumption in America vs. China
China's luxury consumption has increased dramatically in recent years. According to a 2012 report, Chinese consumption of luxury goods accounted more than one fourth of worldwide consumption, and Mainland China ranked as the 5th largest personal luxury goods market (McKinsey & Company, 2012). China's expenditure on luxury goods accounts for 20% of personal income, while globally average expenditure was 4% of income (HuiCong D&B Market Research, 2009). However, data from the World Bank shows that in 2012, China's Gross Domestic Product (GDP) per capita was only 7% of the U.S. The goal of this thesis is to investigate differences in luxury consumption motivations between American consumers, Chinese consumers residing in America, and Chinese consumers residing in China. The thesis also will explore the effects of cultural factors on motivations. Social surveys were created and conducted in a Midwestern American University to get the data for the two samples of American consumers and the Chinese Immigrants. For the Chinese sample a social survey was conducted in three different college-level institutions. The set of hypothesis was created based on inferences from the theoretical framework. Statistical analyses were performed to test the validity of these hypotheses in terms of the three samples. Some hypotheses are strongly supported. For example, we found that materialism was a strong driver for different motivations for luxury consumption. Also, we found that a stronger emphasis on Social Dominance values in the Chinese sample than the American one. There were, however, some hypothesis that were not supported. Suggestions are offered for future research on this important and timely topic.