Monthly Archives: February 2026

Encouraged in Theory, Rejected in Practice: The Cost of Consumer Stigma

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A newly released study in the Journal of Consumer Psychology highlights a quiet contradiction within ethical consumer behaviour. While many shoppers express strong moral approval for companies that employ people experiencing homelessness, those same consumers often become less inclined to purchase from those businesses. Beneath public support lies a more profound social discomfort that subtly shapes buying decisions, revealing how good intentions do not always translate into real-world action.

The research was led by Brandon Reich, an Associate Professor of Marketing at Portland State University, and focused on a growing business practice known as impact hiring. This approach centres on employing individuals from marginalised communities as a way to create social good alongside commercial success. Through five carefully designed experiments, the researchers examined how consumers reacted when they learned a company hired people experiencing homelessness, tracking both moral judgment and purchase behaviour.

Across the studies, participants consistently praised the companies for doing the right thing. However, when it came to evaluating the products themselves, a different pattern emerged. Purchase intentions dropped noticeably once the hiring practice became prominent. The researchers traced this response to unconscious “contagion concerns” — emotional reactions rooted in long-standing social stigma rather than rational assessment of product quality or company values.

This disconnect illustrates what the authors describe as a Say–Do Gap. Consumers may genuinely believe a company is ethical and socially responsible, yet instinctive feelings of discomfort override those beliefs. The presence of homeless employees triggered automatic emotional responses, particularly disgust, linked to stereotypes about hygiene, safety, and risk. Even though participants knew these reactions were unfair, the emotions still influenced their choices at the checkout.

Reich explained that when people experiencing homelessness were placed in visible, customer-facing roles, consumers often claimed to support the initiative but were simultaneously less likely to buy from the company. The stigma surrounding homelessness quietly shaped perceptions of the products themselves, leading shoppers to distance themselves despite their stated moral approval. It was not a conscious rejection, but an emotional reflex driven by deeply ingrained bias.

The study also explored ways businesses could counteract this effect without abandoning their social mission. One particularly effective solution involved using social proof in marketing. When consumers were shown that many other people already purchased and enjoyed the products, their concerns diminished. Signals of popularity and trust helped reassure shoppers about safety and quality, weakening the emotional response linked to stigma.

These findings offer a hopeful message for socially driven companies. With thoughtful communication strategies, businesses can support marginalised workers while maintaining consumer confidence and sales. More broadly, the research exposes how ethical values often compete with unconscious emotional reactions in everyday decisions. Understanding this tension is crucial for creating markets where social impact and commercial success can truly work hand in hand.

More information: Brandon J. Reich et al, Homelessness-based impact hiring and consumers’ contagion concerns, Journal of Consumer Psychology. DOI: 10.1002/jcpy.70010

Journal information: Journal of Consumer Psychology Provided by Portland State University

Major FAU/CSU study reveals more paid time off helps retain American workers

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At the peak of the “Great Resignation” in 2021, more than 50 million people across the United States left their jobs, driven by rising stress levels, burnout and changing expectations about work-life balance. Nearly half of those who quit pointed to poor or insufficient benefits as a significant reason for their departure. This unprecedented wave of resignations highlighted how deeply employees value support that allows them to rest, recover and manage personal responsibilities alongside their professional lives.

Among wealthy nations, the United States remains the only country that does not guarantee paid time off, including paid holidays, vacation days or maternity leave. Across the Organisation for Economic Co-operation and Development, such protections are considered basic employment standards. Although some employers have expanded PTO offerings in recent years, many workers still receive no paid leave at all, and fewer than half benefit from consolidated leave policies that combine personal, sick and holiday time.

The financial impact of high employee turnover is substantial, with the cost of replacing a single worker often reaching the equivalent of a full year’s salary once recruitment, training and lost productivity are factored in. A new long-term study suggests that robust PTO policies are essential for reducing these losses. Using 18 years of national data and more than 32,000 observations, researchers examined how different levels of paid time off influence voluntary resignations.

The study was the first to apply the Conservation of Resources Theory to PTO, which proposes that employees are more likely to remain in their roles when they have sufficient time to restore their energy and cope with personal demands. Rather than simply measuring whether paid leave exists, researchers explored how varying amounts affect turnover, paying special attention to early-career men and women and how their responses differ over time.

Results showed that offering just one to five days of paid time off produced only minor reductions in quitting and little impact when genders were analysed separately. Providing six to ten days, however, significantly lowered resignations, especially among men. The most substantial retention effect appeared when employees received 11 or more paid days off per year, with both men and women far less likely to leave their jobs.

For women, smaller amounts of PTO made little difference, but once leave exceeded 11 days, quitting dropped sharply, suggesting they generally require more time off than men to reduce turnover meaningfully. Although men already resign at lower rates overall, additional PTO benefited both groups. The findings indicate that minimal leave policies are insufficient, and that meaningful time away from work is not a luxury, but a proven strategy for stability, wellbeing and long-term employee retention.

More information: Patricia Stoddard Dare et al, Does one week now prevent two weeks notice later? A longitudinal study of paid time off and employee retention, Journal of Strategy and Management. DOI: 10.1108/JSMA-02-2025-0059/1337299

Journal information: Journal of Strategy and Management Provided by Florida Atlantic University

Climate change and the new reality of doing business

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Climate change is no longer only unsettling supply chains and eroding asset values; it is also quietly influencing the way companies choose and manage their business relationships. Beyond the visible impacts on operations and infrastructure, environmental risk is now shaping strategic decisions that once seemed unrelated to climate concerns. One of the most apparent shifts is happening in how firms structure their customer bases, as executives increasingly recognise that who they depend on for revenue can either expose them to greater vulnerability or help protect them from future shocks.

New research drawing on nearly two decades of data from thousands of publicly listed companies in the United States shows a clear pattern. Businesses facing higher levels of climate-related risk are deliberately reducing their reliance on a small number of major customers. Instead of concentrating sales among a few large buyers, these firms are spreading revenue across a wider group of clients. This diversification is emerging as a practical way of managing uncertainty in a world where extreme weather, regulatory change, and environmental disruption are becoming more frequent.

Published in Business Strategy and the Environment, the study finds that climate risk is actively driving this strategic shift rather than merely coinciding with it. Companies exposed to greater threats from storms, heatwaves, flooding, or climate-related policy transitions are significantly less likely to allow a handful of customers to dominate their income. The research suggests that firms are learning from experience, adjusting their commercial structures to avoid situations where a single climate event could damage both their operations and their primary sources of revenue at the same time.

The effect is powerful among organisations with high levels of innovation, strong corporate social responsibility performance, and heavy investment in physical assets such as factories and infrastructure. These firms appear more aware that customer concentration can magnify financial shocks. When assets are expensive and difficult to relocate, losing one major customer due to climate disruption can have long-lasting consequences. Diversifying revenue streams, therefore, becomes a form of resilience, not just a growth strategy.

For investors and lenders, the findings highlight an often-overlooked dimension of climate risk. Traditional assessments tend to focus on physical exposure or carbon emissions, yet customer structure may be just as important. Companies with broad, diversified client bases may be better insulated from earnings volatility, financing stress, and sudden downturns caused by environmental events. Concentrated revenue, by contrast, can act as a pressure point when climate shocks ripple through interconnected businesses.

For boards and regulators, the study reframes customer concentration as a governance issue. Persistently high dependence on a small group of buyers in climate-exposed regions may signal weaknesses in risk management and long-term planning. Climate resilience is no longer only about where assets are located or how sustainable operations appear on paper. It is also about how exposed a company is through its commercial relationships. In today’s changing business landscape, customer concentration has quietly become a climate issue in its own right.

More information: Thi Thuy Trang Nguyen et al, Climate Change Risks and Customer Concentration: Evidence From US-Listed Firms, Business Strategy and the Environment. DOI: 10.1002/bse.70495

Journal information: Business Strategy and the Environment Provided by University of East London

Study explores the role of municipal support in boosting local commerce

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As tax season gathers momentum, many residents find themselves questioning whether the money they pay is too much. Rising costs of living often make any form of taxation feel burdensome, and local levies are no exception. Yet new research suggests that, at least in Ohio, city service taxes may be providing far more value than many people assume, particularly when it comes to supporting thriving commercial areas and long-term economic stability.

A recent study by University of Cincinnati economics professor David Brasington indicates that these municipal taxes are not excessive. Instead, they play a crucial role in maintaining the public services that keep communities functional and attractive to businesses. Funds collected go towards essential areas such as fire protection, public transport, road repairs, and the maintenance of parks and shared spaces. According to Brasington, communities that continue to invest in these services tend to experience better economic outcomes than those that choose to reduce funding.

The research, published in Regional Science and Urban Economics, examined what happened in comparable towns and cities that made different decisions about local taxes. Some communities voted to cut or reduce their service taxes, while others chose to renew them. Brasington and his team then tracked the level of commercial property redevelopment over the following years to see whether these policy choices made a measurable difference.

The contrast was striking. Areas that maintained their taxes — and therefore their public services — consistently saw more redevelopment of commercial properties than those that opted for cuts. The tax measures studied covered a broad range of everyday services, from bus drivers’ wages to landscaping in public parks. When taxes were reduced, these services were often scaled back, leading to less well-maintained infrastructure and fewer resources supporting daily community life.

Brasington explained that the message from the data was straightforward. Communities hoping to protect their commercial tax base and encourage new investment are better served by renewing local taxes rather than trimming them. This held even for towns experiencing financial pressure. While cutting taxes might seem like a quick solution or a way to attract businesses, the evidence showed that strong, reliable public services actually create a healthier environment for commercial growth.

That said, the findings were not without nuance. Most of the redevelopment benefits appeared in service-focused communities rather than manufacturing-based ones. Additionally, for cities experiencing population decline, the results were less definitive. While there were signs that maintaining public services could help encourage some redevelopment, the evidence was more suggestive than conclusive. Even so, the research challenges the common belief that lower taxes automatically lead to stronger business success, pointing instead to the importance of well-funded local services in building vibrant, resilient communities.

More information: David M. Brasington et al, Effect of local government taxes and spending on the redevelopment of commercial property, Regional Science and Urban Economics. DOI: 10.1016/j.regsciurbeco.2026.104202

Journal information: Regional Science and Urban Economics Provided by University of Cincinnati