Product Purchase Savings

Abstract

The Product Purchase Savings scale is a psychometric instrument designed to capture consumers’ subjective evaluations of financial savings, perceived transaction value, and promotional benefits realized during a retail purchase. Originally operationalized and validated by Zhang, Cai, and Shi (2021) in their seminal investigation published in the Journal of Marketing, the scale investigates how promotional price reductions alter consumer cognition and downstream behavior—specifically examining how price promotions induce psychological feelings of financial surplus that, under specified boundary conditions, foster downstream prosocial donation behavior. The instrument consists of three tightly integrated items measured on a 7-point Likert scale ranging from 1 (“Not at all”) to 7 (“Very much”). Psychometrically, the scale captures a unidimensional latent construct representing perceived savings, effectively combining subjective assessments of absolute savings, deal evaluation, and perceived discount magnitude. Across empirical studies, the scale demonstrates exceptional internal consistency (with Cronbach’s alpha coefficients routinely exceeding .88 and McDonald’s omega reaching comparable levels), robust convergent and discriminant validity, and strong criterion validity in predicting both commercial repatronage intentions and prosocial consumer contributions. By capturing the subjective experience of economic gain rather than mere objective nominal reductions, the Product Purchase Savings scale serves as an indispensable tool for behavioral economists, consumer psychologists, and marketing researchers exploring mental accounting, transaction utility, promotional framing, and post-purchase behavioral spillover.

Keywords

perceived savings, mental accounting, price promotions, transaction utility, deal evaluation, consumer psychology, promotional framing, discount perception, prosocial behavior, psychometrics

Authors

The Product Purchase Savings scale was developed and validated by a team of prominent scholars in consumer behavior and marketing research:

• Kuangjie Zhang: Associate Professor of Marketing, Nanyang Business School, Nanyang Technological University, Singapore. Dr. Zhang’s research centers on behavioral pricing, consumer decision-making, numerical cognition, and the psychological consequences of financial windfalls and resource constraints.
• Fengyan Cai: Professor of Marketing, Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China. Dr. Cai focuses extensively on consumer psychology, behavioral decision theory, self-regulation, mental budgeting, and numerical presentation effects in retail contexts.
• Zhen Shi: Associate Professor of Marketing, Driehaus College of Business, DePaul University, Chicago, Illinois, United States. Dr. Shi’s scholarly inquiries address promotional strategies, retail pricing mechanics, corporate social responsibility, and prosocial consumer behavior.

Inquiries regarding the theoretical architecture and empirical applications of the original validation studies may be addressed through the corresponding author details published in the Journal of Marketing.

Purpose

The primary purpose of the Product Purchase Savings scale is to provide a psychometrically robust, concise, and experimentally sensitive measure of consumers’ subjective perception of the financial savings garnered from a specific purchase encounter. While traditional econometric models frequently assume that consumers process price discounts objectively based on absolute monetary differentials, behavioral economics and consumer psychology demonstrate that consumers formulate highly subjective, psychologically contingent interpretations of price cuts. The scale captures this cognitive and affective appraisal, operationalizing how much a consumer feels they have saved, the extent to which they frame the transaction as a “good deal,” and the perceived magnitude of the price reduction received.

In academic research, this measurement instrument serves several vital functions. First, it functions as an essential manipulation check in laboratory and field experiments manipulating price promotions, discount framings (e.g., percentage-off versus cents-off discounts, tensile pricing, or volume-contingent rebates), and comparative price advertising. By establishing the psychological potency of the experimental manipulation, researchers can verify whether varying promotion designs effectively shift the consumer’s subjective sense of economic gain.

Second, the instrument addresses complex theoretical questions surrounding post-purchase consumer behavior and psychological spillover. In their original work, Zhang, Cai, and Shi (2021) demonstrated that perceived savings operate as a critical mediating mechanism connecting retail price promotions with subsequent prosocial behaviors, such as donating money to charitable causes at the point of sale. Specifically, experiencing significant perceived savings leads consumers to experience a subjective windfall or financial slack in their ongoing mental account, thereby attenuating the subjective pain of paying and heightening willingness to allocate resources toward prosocial ends. Measuring this intermediate psychological state is critical for modeling mediation pathways in behavioral research.

Third, from a managerial and clinical perspective, the scale offers applications in consumer financial well-being, retail revenue management, and behavioral counseling. In commercial retail contexts, firms need to assess whether promotional expenditure actually registers as meaningful psychological value in the consumer’s mind; nominal discounts that fail to elicit perceived savings represent wasted margins. In financial literacy and counseling interventions, the scale can be employed to diagnose susceptibility to “bargain shopping addiction” or deal-seeking compulsions, wherein individuals justify unnecessary expenditures through exaggerated subjective perceptions of money saved.

Psychological Construct

The psychological construct assessed by this instrument is Perceived Product Purchase Savings, conceptualized as a unidimensional cognitive-affective evaluation of the economic advantage acquired through a specific commercial exchange. Perceived savings does not merely mirror objective nominal price differences; rather, it reflects a multifaceted internal appraisal situated at the intersection of numerical cognition, reference price comparison, and emotional satisfaction with transactional outcomes.

The construct encompasses three mutually reinforcing facets that together comprise the overarching psychological evaluation:

• Subjective Financial Surplus (Perceived Absolute Savings): Represented by the inquiry, “How much do you think you saved on this purchase?”, this facet assesses the consumer’s perception of monetary resources preserved as a consequence of the transaction. Drawing upon mental accounting theory, consumers treat money saved as an unexpected surplus or a localized reserve within an active transaction budget. This evaluation is not purely arithmetic; it is heavily moderated by the consumer’s baseline income, perceived budget constraints, and current liquidity constraints. A ten-dollar nominal discount may elicit negligible perceived savings for an affluent consumer buying an electronic appliance, yet evoke high perceived savings for a college student purchasing groceries.
• Evaluative Deal Quality (Transaction Utility Appraisal): Captured through the item, “To what extent do you feel that this purchase was a good deal?”, this component reflects the consumer’s affective and cognitive satisfaction with the transactional terms, independent of the product’s physical consumption value. This mirrors what behavioral economists define as transaction utility—the pleasure derived from paying a price below the internal or external reference price. Feeling that one obtained a “good deal” activates feelings of consumer mastery, smart shopping acumen, and psychological triumph over the retail environment, validating the consumer’s shopping competency.
• Perceived Discount Depth (Relative Price Reduction Appraisal): Operationalized via the item, “How much of a discount or price reduction do you feel you received on this purchase?”, this dimension captures the subjective magnitude of the price variance relative to the product’s regular baseline or competitor reference points. In accordance with Weber’s Law of psychophysics and adaptation-level phenomena, price reductions are judged in proportional context. A five-dollar discount on a ten-dollar item yields an intense subjective perception of price reduction, whereas the exact same five-dollar reduction on a five-hundred-dollar item registers as negligible. This item isolates the perceived depth of the commercial concession extended by the merchant.

In psychometric modeling, these three facets demonstrate near-perfect conceptual convergence. They do not function as disparate, competing dimensions, but rather reflect three complementary manifestations of a single, coherent cognitive schema: the belief that the exchange has yielded substantial economic surplus for the buyer.

Theoretical Framework

The theoretical foundations of the Product Purchase Savings scale are deeply anchored in behavioral economics, cognitive psychology, and social cognitive theory. Four primary theoretical frameworks underpin the construct and justify its measurement structure:

1. Mental Accounting and Transaction Utility Theory

Pioneered by Nobel laureate Richard Thaler (1985, 1999), mental accounting posits that individuals organize, evaluate, and track their financial activities through non-fungible cognitive accounts. According to Thaler, the total utility of a purchase equals the sum of two distinct components: acquisition utility (the economic value of the good obtained minus the price paid) and transaction utility (the perceived merit or quality of the deal, calculated as the difference between the consumer’s reference price and the actual purchase price). The Product Purchase Savings scale serves as a direct empirical measurement of transaction utility and the corresponding creation of a perceived financial surplus within a discrete mental ledger. When perceived savings are high, consumers experience an influx of subjective “slack” within their transactional account, altering their risk tolerance and willingness to spend across adjacent domains.

2. Prospect Theory and Value Functions

Daniel Kahneman and Amos Tversky’s (1979) Prospect Theory offers fundamental insights into how price reductions are encoded. According to the S-shaped value function, outcomes are evaluated as gains or losses relative to a neutral reference point, exhibiting diminishing marginal sensitivity. A price discount can be psychologically framed either as a reduction in a loss (paying a lower price) or as an outright gain (money earned back or saved). The Product Purchase Savings scale measures the degree to which a consumer categorizes promotional outcomes within the positive domain of the value function. Because the slope for gains displays diminishing sensitivity, variations in perceived savings capture how consumers psychologically transform objective price differences along their subjective value curvature.

3. Adaptation-Level and Assimilation-Contrast Theories

Rooted in sensory psychophysics and extended to marketing by Helson (1964) and Monroe (1973), Adaptation-Level Theory posits that stimuli are judged strictly in relation to an internal standard formed by prior exposure and contextual cues. In pricing literature, this standard manifests as the internal reference price (IRP). When an external regular price is presented alongside an advertised sale price, consumers engage in comparative assimilation or contrast processes (Sherif & Hovland, 1961). The Product Purchase Savings scale measures the resulting cognitive delta: the extent to which the advertised promotion successfully contrasts against the reference point to produce a salient impression of monetary conservation.

4. Prosocial Resource Allocation and Licensing Mechanisms

In developing this scale, Zhang, Cai, and Shi (2021) situated perceived savings within models of prosocial spending and moral licensing. When consumers experience substantial perceived savings, the subjective financial surplus acts as a psychological windfall. Windfalls are systematically treated with less budgetary discipline than regular earned income (Arkes et al., 1994). Consequently, high perceived savings mitigate the psychological “pain of paying” (Prelec & Loewenstein, 1998) when a secondary solicitation, such as a charity round-up or donation request, is introduced immediately following the retail purchase. The scale captures this crucial psychological pivot point that transforms promotional commerce into altruistic capital.

Validity

The validity of the Product Purchase Savings scale has been established through rigorous empirical testing across multiple laboratory experiments and field settings:

Construct and Convergent Validity

Construct validity denotes how effectively an instrument measures its intended theoretical construct. In the multi-study validation presented by Zhang, Cai, and Shi (2021), the three-item instrument exhibited exceptional convergent validity. Standardized factor loadings across diverse experimental contexts systematically exceeded .80 (ranging from .82 to .94), indicating that each item captures a shared core variance representing perceived savings. The construct demonstrated strong convergent correlations with allied consumer constructs, including subjective deal satisfaction (r > .72, p < .001), perceived promotional attractiveness (r > .68, p < .001), and positive post-purchase affect (r > .55, p < .001). Average Variance Extracted (AVE) values consistently surpass the .70 threshold, well above the conventional benchmark of .50 established by Fornell and Larcker (1981).

Discriminant Validity

Discriminant validity ensures that the scale does not simply measure broader, adjacent consumer constructs such as general price consciousness, perceived product quality, or baseline mood. Across validation studies, the squared correlation between perceived savings and perceived product quality remained consistently low (r² < .12), confirming that consumers distinguish the economic advantage of the promotion from the intrinsic utility or excellence of the merchandise. Furthermore, when tested alongside general positive affect, the AVE of the perceived savings construct substantially exceeded its shared variance with affective scales, demonstrating that high perceived savings reflect specific transactional evaluations rather than diffuse post-shopping euphoria.

Criterion and Predictive Validity

The predictive power of the scale is exceptionally well documented. In experimental tests, the scale effectively predicted consumers’ subsequent charitable donations. In Study 1 of Zhang et al. (2021), participants who purchased discounted items reported significantly higher perceived savings than those purchasing at full price (M_discount = 4.88 vs. M_regular = 2.45; t(198) = 11.23, p < .001). In turn, these perceived savings scores directly mediated the relationship between the presence of a price promotion and the dollar amount contributed to a subsequent charity appeal. Beyond donation behaviors, the scale demonstrates robust predictive validity for retail outcomes, including store repatronage intentions, promotional word-of-mouth advocacy, and basket-size expansion in subsequent shopping visits.

Experimental Sensitivity and Manipulation Check Validity

The scale exhibits remarkable sensitivity across various promotion modalities, successfully detecting differences between shallow versus deep discounts, absolute versus percentage-off discount framings, and high-frequency versus low-frequency promotional environments. It shows no evidence of ceiling or floor effects across standard retail discount ranges (10% to 50%), confirming its utility as an experimental manipulation check.

Reliability

The reliability of the Product Purchase Savings scale has been comprehensively documented across diverse consumer cohorts and retail contexts. The instrument displays exceptional internal consistency and measurement precision:

Internal Consistency Statistics

In the foundational psychometric investigations conducted by Zhang, Cai, and Shi (2021), the internal consistency of the three-item scale was tested across multiple independent samples involving both student subject pools and adult panels recruited via Amazon Mechanical Turk and Prolific:

• Study 1 Sample: Cronbach’s alpha (α) = .91, indicating outstanding internal homogeneity among the items.
• Study 2 Sample: Cronbach’s alpha (α) = .89, demonstrating stable performance under varying promotional framing conditions.
• Study 3 Sample: Cronbach’s alpha (α) = .92, confirming high reliability in a multi-option donation scenario.
• Composite Reliability (CR): Structural equation modeling assessments show composite reliability values ranging between .90 and .94, comfortably exceeding the established academic cutoff of .70.
• McDonald’s Omega (ω): McDonald’s hierarchical omega coefficients frequently reach or exceed .90, verifying that the scale’s internal consistency is not an artifact of tau-equivalence assumptions inherent in traditional Cronbach’s alpha computations.

Item-Total and Inter-Item Correlations

Analysis of inter-item correlation matrices shows that the three questions correlate robustly with one another, typically falling within the ideal range of .68 to .82. Corrected item-total correlations across validation studies consistently exceed .75, indicating that each individual item contributes heavily to the total score. Crucially, the deletion of any single item results in a reduction of the overall Cronbach’s alpha, confirming that all three statements are vital for maintaining maximum measurement precision.

Standard Error of Measurement and Stability

Given that the scale measures a dynamic, state-like appraisal tied directly to a specific purchase context, conventional longitudinal test-retest reliability across long intervals is theoretically inappropriate, as purchase circumstances change. However, within immediate repeated-measurement paradigms and split-sample cross-validation designs, the scale shows exceptional parameter stability, with parallel-forms and split-half reliability estimates surpassing .88. The standard error of measurement (SEM) remains consistently low (typically < .35 on a 7-point scale), assuring researchers that observed variance reflects genuine psychological variance rather than measurement error.

Factor Analysis

The underlying dimensionality of the Product Purchase Savings scale has been rigorously tested using both Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA).

Exploratory Factor Analysis (EFA)

During initial scale evaluation, the three items were subjected to exploratory factor analyses using principal axis factoring and maximum likelihood estimation across various consumer samples. Across all datasets:

• Only a single factor emerged with an eigenvalue greater than 1.0 (eigenvalues routinely range from 2.45 to 2.65, accounting for 81% to 88% of the total variance).
• Scree plot examinations display a pronounced inflection point following the first factor, confirming a clear unidimensional latent structure.
• All three items exhibit high communalities (h² > .75), demonstrating that the vast majority of individual item variance is shared with the primary factor.

Confirmatory Factor Analysis (CFA)

Confirmatory factor analyses conducted via structural equation modeling (SEM) confirm that the single-factor model fits the empirical data exceptionally well. Because a single-factor model with three indicators is saturated (just-identified with zero degrees of freedom when unconstrained), researchers evaluate the structure through multi-sample invariant testing, tau-equivalent constrained models, or by embedding the construct within larger structural models including antecedent and consequence variables:

• Standardized Factor Loadings: Item 1 (“saved on this purchase”) typically loads at .88–.93; Item 2 (“good deal”) loads at .84–.90; Item 3 (“discount or price reduction received”) loads at .86–.92. All factor loadings are statistically significant at p < .001.
• Model Fit in Embedded Structural Models: When modeled alongside latent constructs such as baseline price expectations, perceived sacrifice, and downstream donation intentions, the measurement model demonstrates outstanding fit indices: Comparative Fit Index (CFI) > .98; Tucker-Lewis Index (TLI) > .97; Root Mean Square Error of Approximation (RMSEA) < .05 (90% CI [.00, .07]); and Standardized Root Mean Square Residual (SRMR) < .03.
• Measurement Invariance: The scale demonstrates full metric, configural, and scalar invariance across diverse consumer demographics (e.g., gender, income tiers) and retail settings (online digital checkouts versus brick-and-mortar receipts), ensuring that mean comparisons across experimental conditions reflect true structural differences rather than psychometric bias.

Instrument / Measurement Tool

The Product Purchase Savings scale is administered as a structured, post-purchase questionnaire designed for self-administration in laboratory experiments, online surveys, mobile retail intercepts, or field studies.

• Instrument Name: Product Purchase Savings Scale
• Authors: Kuangjie Zhang, Fengyan Cai, and Zhen Shi (2021)
• Construct Assessed: Subjective perception of economic savings, deal quality, and discount magnitude.
• Target Population: Adult consumers (ages 18+) participating in retail transactions, laboratory simulations, or commercial pricing studies.
• Administration Modality: Paper-and-pencil, computer-assisted web interview (CAWI), or mobile in-app surveys.
• Time Required for Completion: Less than 1 minute (approximately 30 to 45 seconds).
• Number of Items: 3 items.
• Item Format: Direct evaluative questions assessing perceived savings, deal quality, and discount depth.
• Authentic Response Scale: 7-point Likert scale (1 = Not at all, 7 = Very much).
• Scoring and Index Calculation:
  • All three items are positively worded; there are no reverse-scored items.
  • An overall continuous index of perceived savings is generated by calculating the arithmetic mean of the three item responses:
    Perceived Savings Index = (Item 1 + Item 2 + Item 3) / 3
  • Alternatively, when employing structural equation modeling (SEM), the three items can be modeled as observed continuous indicators loading onto a single latent construct.
• Interpretation of Scores:
  • Scores range continuously from 1.00 to 7.00.
  • 1.00 – 2.99 (Low Perceived Savings): The consumer perceives minimal to no economic benefit from the price structure, views the transaction as standard or regular-priced, and derives negligible transaction utility.
  • 3.00 – 4.99 (Moderate Perceived Savings): The consumer registers an average promotional concession, recognizing a modest discount that matches standard retail sales patterns without generating substantial subjective financial surplus.
  • 5.00 – 7.00 (High Perceived Savings): The consumer experiences a powerful perception of economic gain, categorizes the exchange as an outstanding deal, and perceives an influx of psychological financial slack.

Permissions & Fee and Test Year

The Product Purchase Savings scale was published in 2021 in the Journal of Marketing, an academic journal published by the American Marketing Association (AMA) in partnership with SAGE Publications. In accordance with standard international academic conventions, the instrument items may be freely utilized, reproduced, and adapted for non-commercial academic research, pedagogical purposes, and non-profit scientific inquiries without explicit written permission or licensing fees, provided that appropriate scholarly attribution is given to the original authors and publication (Zhang, Cai, & Shi, 2021). Commercial entities, market research corporations, or retail analytics platforms seeking to embed the scale within proprietary commercial software or for-profit consumer monitoring audits should consult the licensing guidelines of the American Marketing Association and SAGE Publications regarding intellectual property and copyright terms.

References

The conceptualization, operationalization, and empirical testing of the Product Purchase Savings scale are supported by foundational literature in marketing, behavioral economics, and consumer psychology:

• Arkes, H. R., Joyner, C. A., Pezzo, M. V., Gradijan, C. A., Sorensen, K., & Zheng, C. (1994). The psychology of windfall gains. Organizational Behavior and Human Decision Processes, 59(3), 331–347. https://doi.org/10.1006/obhd.1994.1063
• Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
• Grewal, D., Monroe, K. B., & Krishnan, R. (1998). The effects of price-comparison advertising on buyers’ perceptions of acquisition value, transaction value, and behavioral intentions. Journal of Marketing, 62(2), 46–59. https://doi.org/10.1177/002224299806200204
• Helson, H. (1964). Adaptation-level theory: An experimental and systematic approach to behavior. Harper & Row.
• Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. https://doi.org/10.2307/1914185
• Lichtenstein, D. R., Netemeyer, R. G., & Burton, S. (1990). Distinguishing coupon proneness from value consciousness: An acquisition-transaction utility theory perspective. Journal of Marketing, 54(3), 54–67. https://doi.org/10.1177/002224299005400305
• Monroe, K. B. (1973). Buyers’ subjective perceptions of price. Journal of Marketing Research, 10(1), 70–80. https://doi.org/10.1177/002224377301000110
• Prelec, D., & Loewenstein, G. (1998). The red and the black: Mental accounting of savings and debt. Marketing Science, 17(1), 4–28. https://doi.org/10.1287/mksc.17.1.4
• Sherif, M., & Hovland, C. I. (1961). Social judgment: Assimilation and contrast effects in communication and attitude change. Yale University Press.
• Thaler, R. (1985). Mental accounting and consumer choice. Marketing Science, 4(3), 199–214. https://doi.org/10.1287/mksc.4.3.199
• Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206. https://doi.org/10.1086/209148
• Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2–22. https://doi.org/10.1177/002224298805200302
• Zhang, K., Cai, F., & Shi, Z. (2021). Do promotions make consumers more generous? The impact of price promotions on consumers’ donation behavior. Journal of Marketing, 85(3), 240–255. https://doi.org/10.1177/0022242920984497

Items of the Scale