Economic Instability and Consumer Behaviour: A Study of Emotional Mediation and Demographic Moderation

Abstract

Economic instability has become an increasingly important factor influencing consumer decision-making, yet the psychological mechanisms by which it affects purchasing behaviour remain poorly understood. This study investigates the impact of economic factors on impulsive buying behaviour, examining the mediating role of fear and anxiety and the moderating effects of age and gender. The research is grounded in the Stimulus–Organism–Response (SOR) framework, which explains how external environmental stimuli influence internal psychological states and subsequent behavioural responses. A quantitative research design was employed using primary data collected from 401 consumers through a structured questionnaire. Economic factors, fear and anxiety, and impulsive buying behaviour were measured using validated Likert-scale items. Data were analyzed using the PROCESS Macro in Statistical Package for the Social Sciences (SPSS). Mediation effects were examined through PROCESS Model 4, while moderation effects were tested using PROCESS Model 2. Bootstrapping with 5,000 resamples was used to assess the significance of indirect effects. The findings reveal that economic factors significantly and positively influence impulsive buying behaviour. Economic factors were also found to significantly increase fear and anxiety, which, in turn, exerted a strong positive effect on impulsive buying. Mediation analysis confirmed that fear and anxiety partially mediate the relationship between economic factors and impulsive buying behaviour, indicating that economic stress affects consumer purchasing decisions both directly and indirectly through emotional distress. Furthermore, age and gender significantly moderated the relationship between economic factors and impulsive buying. Younger consumers exhibited stronger impulsive buying tendencies under economic stress, while the strength of the relationship varied across gender groups. The study contributes to consumer behaviour literature by integrating economic and psychological perspectives within a single framework. The findings highlight the importance of emotional responses in understanding consumer behaviour during periods of economic uncertainty and provide valuable insights for researchers, marketers, and policymakers seeking to promote informed and financially responsible consumer decision-making.