A new study published in the Journal of Consumer Psychology reveals a hidden tension in ethical consumerism: While consumers morally support companies that hire individuals experiencing homelessness, deep-seated social stigmas can inadvertently drive down sales.
The research, led by Portland State University Associate Professor of Marketing Brandon Reich, investigates "impact hiring" — the practice of employing marginalized groups for social good. Across five experiments, researchers found that while consumers outwardly praise these initiatives, their purchase intentions often drop due to irrational "contagion concerns."
The Say-Do Gap
The study provides empirical evidence that a consumer's moral judgment (believing a company is "good") does not always translate into favorable product evaluation. The researchers found that when a company's hiring of homeless individuals was made salient, it triggered an automatic emotional response — specifically disgust — linked to stereotypes about hygiene and safety. This emotional reaction overrode the consumer's rational, moral support for the social cause, resulting in lower purchase likelihood.
"When a company hires frontline employees experiencing homelessness, consumers claim to support the practice but are actually less likely to buy products from that company due to a pre-existing stigma biasing their decision," Reich said.
Mitigating the Effect
The research identifies a specific psychological intervention to counteract this bias. The negative effect on sales was neutralized when companies utilized "social proof" appeals — marketing cues that subtly communicate that the products are already consumed and liked by many others. This framing assures consumers of the product's quality and safety, effectively dampening the stigma-driven emotional response.
"The good news is that these socially-oriented companies can simultaneously mitigate this stigma and increase purchase likelihood through use of a social proof appeal," Reich noted.
