The present research investigated whether stereotypes embedded within the luxury market (Han, Nunes, & Dreze, 2010) can undermine decision performance for lower-income consumers, who encounter negative stereotypes about their ability to make good luxury product decisions. Two studies tested the effect of stereotype salience (Shapiro & Neuberg, 2007; Steele, 1997) on lower-income consumers’ performance on a luxury good decision task. In Study 1, we manipulated the decision domain (luxury versus economy purchase) and found evidence of the predicted stereotype threat effect among lower-income consumers performing a luxury (but not economy) market decision task. In Study 2, we manipulated the extent to which the luxury market stereotype would be seen as an accurate reflection of actual income-based differences in the ability to make good luxury product decisions. We found that the gap in the decision task between lower- and higher- income consumers was attenuated when the stereotype had been portrayed as inaccurate. Together, these studies suggest that marketers and policy-makers should recognize this stereotype threat in the marketplace, which undermines the quality of important purchase decisions by lower-income consumers, and should implement interventions to protect their welfare.

Consumers and sources are embedded in cultural contexts that influence how those sources are read. We examine how consumers stigmatized for being fat collectively read advertisements for luxury fashion brands featuring plus-sized sources. We unveil individual and cultural resources stigmatized consumers rely on to collectively develop readings of advertising sources.