The closer I am, the safer I feel: The "distance proximity effect" of COVID-19 pandemic on individuals' risk assessment and irrational consumption.

ABSTRACT

The unprecedented crisis of COVID-19 posed severe negative consequences for consumers, marketers, and society at large. By investigating the effect of individuals' distance from the COVID-19 epicenter (i.e., the geographical area in which COVID-19 pandemic is currently most severe) on consumers' risk perception and subsequent behaviors, this research provides novel empirical findings that can offer practical insights for marketers. While intuitively, people expect individuals closer to the COVID-19 epicenter to generate a greater risk perception of the pandemic, empirical evidence from four studies provides consistent results for the opposite effect. We find that a closer (vs. farther) distance to the epicenter associates with lower (vs. higher) perceived risk of the pandemic, leading to less (vs. more) irrational consumption behaviors. We refer to this phenomenon as the "distance proximity effect," which holds for both physical and psychological distances. We further demonstrated that this effect is mediated by consumers' perception of uncertainty and moderated by individuals' risk aversion tendency. The current research contributes to the literature of consumers' risk perception and irrational consumption by highlighting a novel factor of distance proximity. It also offers some timely insights into managing and intervening COVID-19 related issues inside and outside an epicenter.