Collaborative Consumption: a New Form of Consumption in a Changing Economy

Home , Consumer confidence, Consumer revolution

COLLABORATIVE CONSUMPTION: A NEW FORM OF CONSUMPTION IN A CHANGING ECONOMY

Katherine Schulist

A Thesis Submitted to the University of North Carolina Wilmington in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration

Cameron School of Business

University of North Carolina Wilmington

2012

Approved by

Advisory Committee

Claire Auplat Noreen O‟Shea

Vince Howe Chair

Accepted by

Dean, Graduate School

TABLE OF CONTENTS

ABSTRACT ...... v

ACKNOWLEDGEMENTS ...... vi

INTRODUCTION ...... 1

THESIS QUESTION ...... 1

METHODOLOGY ...... 2

Introduction ...... 2

Secondary Research ...... 2

Primary Research ...... 2

HYPOTHESIS ...... 4

COLLABORATIVE CONSUMPTION...... 4

Introduction of Collaborative Consumption ...... 4

Technology and Collaborative Consumption ...... 6

Trust and Collaborative Consumption ...... 8

Trust Building Mechanisms ...... 9

ECONOMIC INDICATORS ...... 10

Gross Domestic Product...... 11

Consumer Confidence ...... 13

CONSUMER HISTORY ...... 13

Introduction ...... 13

Global Consumer History ...... 14

Economic and Political Influence on Consumption ...... 16

United States Consumer History ...... 16

Industrial Revolution to Civil War ...... 16

Turn of the Century to Depression Era...... 17

Citizen Consumer vs. Purchaser Consumer ...... 18

World War Two ...... 19

Post-World War Two ...... 20

THE EVOLUTION OF ADVERTISING ...... 23

PRIMARY RESEARCH ANALYSIS ...... 25

Introduction ...... 25

Income and the Economy...... 26

Section 1 ...... 27

Section 2 ...... 28

Section 3 ...... 28

Section 4 ...... 29

Trust...... 30

Privacy ...... 32

Miscellaneous Comments ...... 32

CONCLUSION...... 33

REFERENCES ...... 37

Appendix ...... 40

iii

Questionnaire ...... 40

Section One ...... 40

Section Two ...... 41

Section Three ...... 41

Section Four ...... 42

Section Five ...... 42

ABSTRACT

Through the study of consumer trends in modern western society, and research into factors that have influenced changes in consumption styles over the decades, it should be possible to ascertain whether or not collaborative consumption is a viable option for investment and growth opportunities in the current economy. Investors, entrepreneurs and job seekers should all be interested in the measure of stability in this new market. And as an area that has attracted a large amount of capital, a measure of the staying power of collaborative consumption is an important factor for the discussion of business in the world today. This paper attempts to determine whether or not consumers in the current recessive market environment would be more willing to work with collaborative consumption primarily due to the ability to save money while doing so, and if so, would they also be more likely to discontinue their collaborative consumption practices once the economy returns to a more stable form in which they are not as concerned with their incomes.

ACKNOWLEDGEMENTS

Many people have contributed to my success in this program and completing my thesis over the past year.

First, I would like to thank my advisor, Claire Auplat, for all of her patience with me and for all of her guidance about the writing of my thesis.

Thank you to all of the respondents who took the time to fill out my questionnaire, and for all of their helpful comments and suggestions. I would also like to thank Nicolas Ferrary at

Airbnb for taking the time to meet with me and for helping me find my direction with my thesis.

It is also important for me to say a special thank you to Noreen O‟Shea for all of her help and kind words that made it possible for me to make it through a challenging semester while far away from home.

Debra Berg is another person without whom I would not have made it through the semester, and I need to also take the time to recognize her willful determination and unending patience with me during my time in Paris.

I must also acknowledge the support that was shared among all of the students in the inaugural Novancia IBSA class. The camaraderie that grew amongst the class members, and the teamwork and interaction in both good times and bad, helped make this program not only possible, but also enjoyable.

And lastly, I would like to acknowledge my family for everything they have done to help me with my journey. They mean the world to me, and because of them, I have been able to see the world.

Katie Schulist

vii

INTRODUCTION

Collaborative consumption is a buzz phrase that has been tossed around business development seminars and technical conferences for the past few years as the new direction of trade for a changing economy. Venture capitalists and seed funding companies are aggressively searching to grab the next Airbnb; hoping to be a part of the next collaborative consumption success story (Buczynski, 2012) (Austin, 2011). The unprecedented growth of this style of business in recent years has many people asking, “Is this the next big thing?” Business development professionals are searching for new modes of collaborative consumption in all areas of trade. But, is this new rapid rise of this new style of trade part of a revolution in business markets of the world, or is it simply another trend that will fizzle out once the current market situation changes? Is the development of collaborative consumption businesses a smart business move, or is it another bubble that will burst when the times change?

THESIS QUESTION

Are consumers in the current recessive market environment be more willing to work with collaborative consumption primarily due to the ability to save money while doing so, and if so,

will consumers be more likely to discontinue their collaborative consumption practices once the economy returns to a more stable form in which they are not as concerned with their incomes? Is collaborative consumption a new direction of business, or will it be a short lived trend due to the current economic situation?

METHODOLOGY

Introduction

Through review of economic and political forces that have shaped western consumer society through the last century, as well as through a questionnaire of a cross section of current consumers, I will attempt to determine whether or not current governmental policies and the economic position of the United States, combined with the current attitude of the consumer, create a favorable environment for the growth of this new form of consumption.

Secondary Research

Secondary research will revolve mainly around the study of economic, political and social forces that have caused changes in the consumer culture in the modern era, mainly consisting of developments post-industrial revolution. The evolution of advertising trends will also be taken into account as influential towards consumer behavior. There will be a large focus on events surrounding the Great Depression and World Wars I and II, and how those events shaped consumer culture.

Primary Research

The main goal of the questionnaire will be to determine whether or not the current downturned economy, and therefore people‟s individual incomes, will affect the growth of

collaborative consumption. For this reason, questions are designed to determine 1) If people are willing to use collaborative consumption in their current lifestyle, and 2) If a change in income or economic status would influence their decision when choosing collaborative consumption.

There are five topics covered in the questionnaire: lodging as tenant, lodging as host, paying to rent commodities, being paid to rent out commodities, and an open ended section with and area to determine country of residence, as well as a comment section so that respondents could list any other factors that led to their decisions.

Questions were designed so that respondents would have an opportunity to say which system of trade they would prefer depending on different cost factors. For the first section, participants were asked which option they would choose in a lodging situation if all costs were equal. This will determine which lodging situation a consumer would prefer if money were not a factor. Secondly, respondents were asked which option they would choose if costs were different, specifically if the collaborative consumption costs were half the cost of the hotel, which option they would choose. Finally, respondents were asked if income had affected their decision, and whether or not they would choose the same option if income were not a factor in their choices. For the next sections of questions, a similar format was used to first determine the initial choice of the consumer, followed by questions as to whether or not the choice would change if the income or costs related to the transaction would change the option of the consumer.

This question design will determine how many of the consumers would continue to use a collaborative consumption based business when the economy returns to a more stable position wherein people would no longer be as concerned with the stability of their incomes, and consumer confidence would grow.

HYPOTHESIS

The hypothesized outcome is that in the current market environment, people will be willing to work more with collaborative consumption primarily due to the ability to save money while doing so. The study will also show that people will be more likely to discontinue their collaborative consumption practices once the economy returns to a more stable form in which people are not as concerned with their incomes. This will be shown through the responses stating that the majority of the people will choose to stay in the most economically efficient location according to their current income, but if income, and therefore consumer confidence, were not an issue, then they would be more likely to choose the more expensive option, which would not be an option offered by collaborative consumption. Also, the hypothesis would state that more people would be willing to utilize collaborative consumption if tax breaks were included as part a governmental incentive plan.

COLLABORATIVE CONSUMPTION

Introduction of Collaborative Consumption

The economic downturn of the past few years has brought about a rebirth of an old form of consumption among a growing class of consumers. Many people are choosing to rent items from other consumers rather than purchase the items themselves, and many other consumers have decided to rent out items that they are not using regularly - items that vary from the camper in the yard to the family pet, in order to earn a little extra income. (Baedeker, 2011) This new trend in the market has been called many things; people call it a sharing culture, “The Mesh”, or collaborative consumption (Botsman & Rogers, 2011) (Gansky, 2012). For the duration of this paper, the term used to discuss this topic will be collaborative consumption.

There are many examples of the growth of collaborative consumption in today‟s world.

Among these examples are Velib and Barclay, which are for the use of shared bicycles in large cities and are designed to share goods owned by a parent corporation or a government, and there are also websites designed to facilitate peer-to-peer rental of commodities such as tools or other household items through sites like SnapGoods or whipcar.com (Velib) (Barclays Cycle Hire)

(Snapgoods.com) (WhipCar.com ). Another example, as well as one of the most prominent examples of the trend, is the website Airbnb.com, which enables travelers to rent lodgings directly from the owners or tenants of a house, often sharing the location with the people who live there (Airbnb). And not only are there new businesses sprouting up daily that are following a collaborative consumption model, there are websites and organizations designed with the purpose to bring awareness to all of the new and innovative forms of collaborative consumption on the market each day. Two of the main examples of such websites are www.collaborativeconsumption.com, from What‟s Mine is Yours authors Rachel Botsman and

Roo Rogers, and www.ouishare.net, a website founded by a group of French collaborative consumption advocates that has now expanded to cover fifteen countries in Europe and the

Americas (www.collaborativeconsumption.com) (OuiShare.net).

This new form of consumption, which is very similar to barter systems of generations past, is set to change the way many business plans are written. The business environment is rapidly changing in the ever-changing, fast-paced modern day internet world (Bourlakis,

Papagiannidis, & Fox, 2008). The growth of social media and internet commerce has generated a growing trust among strangers on the internet who have never met except for in cyber-space

(Botsman & Rogers, 2011). The addition of user and buyer rating systems and peer recommendations to all forms of e-commerce sites has ingrained a trust in the minds of the

average consumer that shows them that they can believe in the words of others who are not only not experts, but also virtual strangers in real life (Botsman & Rogers, 2011). This, in combination with the desire to save money or to earn extra income, has helped to create an environment that is ready for the new business model that collaborative consumption brings to the marketplace.

Technology and Collaborative Consumption

The advent of the internet has brought about many changes to the way business is practiced all over the world. In addition to the internet, mobile technology such as GPS has come into play and is also influencing decisions and marketing techniques for many businesses worldwide. Add to all of the above the global popularity of social media, and the marketplace is ripe for changes in business that would have been unimaginable a decade ago. (Gansky, 2012, p. 3)

As recently as a few generations ago, neighbors would rely on each other for a variety of goods and services. It was commonplace to borrow a tool from one neighbor and to give extra tomatoes from your garden to another. But, in today‟s world, people are no longer as close with their neighbors as they once were, and it is no longer common for people to share what they have with those around them. Seventy-five percent of Americans and sixty percent of UK citizens don‟t even know their neighbors‟ names. (Botsman & Rogers, 2011, p. 43) When people now longer know their neighbors, how would it be possible for collaborative consumption to even exist?

This change in the shape of society is where the developments in the internet and mobile technologies come into play. Internet websites allow people with like interests find each other no

matter where they are in the world. One of the first big players in what would become known as the collaborative consumption movement is the online auction website eBay, where people could buy and sell pre-owned goods to each other all over the world (Botsman & Rogers, 2011, p.

127). The development of eBay and other online marketplaces helped build the foundation for the growth of new platforms of business (Gansky, 2012, p. 44). Add in the developments of social media, where people have become accustomed to sharing thoughts and ideas, pictures of their weekend plans and can even follow their favorite brands and celebrities, combined with real-time-and-place updates from the new technology of smart phones and mobile GPS advancements, and it becomes simple to see how perfect the new environment is for a new form of sharing (Botsman & Rogers, 2011) (Gansky, 2012). For example, a person who is on vacation may be sitting at a café and decide they like the area so much they would like to find a place to stay nearby. They can use their phone to check for any vacancies in the neighborhood through the mobile app available for Airbnb. Next, they can decide from the pictures, reviews and friends‟ recommendations on Facebook of the owner and the flat whether or not they would like to stay there, and then they can even book a room for the night without ever having to leave the café (Airbnb). This combination of technologies has filled the gap that had grown between neighbors that once lived in a sharing economy, and now allows the old form of trade to happen in a broader environment. Proponents say that this new development of the old system and its embrace of the new technologies is the main thing that is helping collaborative consumption thrive (Gansky, 2012, p. 44). Whether or not this embrace of technology would be enough to sustain it though economic growth and improved consumer confidence remains to be seen, and will be a factor worth considering in future studies.

Trust and Collaborative Consumption

As we saw in the last section, the rebirth of sharing assets among consumers has been stimulated by the growing influence of the internet in everyday life across the globe. The longer the internet has been active, the more people began to perceive their online relationships as being as close as or closer than their real life relationships (Botsman & Rogers, 2011, pp. 92-93). There is a new generation of consumers who have grown up in a world in which they have been connected to the internet their entire lives. This generation is called the Millennials, and they have a new view on trust and sharing on the internet (Botsman & Rogers, 2011, pp. 97-98).

There is also a growing amount of trust between strangers online, and a lessening trust of large corporations. This has come about due to the large and rapid growth of social media websites as well as the global recession of the past four years that resulted in the misbehavior of a few members in large corporations (Botsman & Rogers, 2011, p. xix). This growing trust amongst internet acquaintances is paramount to the successful growth of collaborative consumption business models. (Grabner-Krauter & Kaluscha, 2008)

In the past, people developed trust within networks of friends and family that they knew in everyday life. This trust was developed through daily interaction as well as repetition of reciprocal actions that would help friends and neighbors with their daily lives. Specifically, it is a collection of resources that a person or organization gains “through a set of communal norms, networks, and sanctions.” (Putnam, 2000) This form of trust is called “social capital” by Robert

Putnam, a political science professor at Harvard University, and is currently experiencing a drop in American society due to the fact that people are trading free time and hobbies for working harder so that they can get nicer car or a bigger house (Botsman & Rogers, 2011). According to

many, this decline in social capital is causing a weakening of American communities (Kapucu,

2011). Or, the answer begs the question as to whether or not a decline in the American communities is actually what is causing the decline in social capital. To be precise, with longer working hours, combined with the advent of technological advances such as the internet, has social capital declined, or has it just transformed into a new mode of virtual, online trust amongst internet communities that is unrecognizable when you compare it to the older model?

Trust Building Mechanisms

Business developers working in the collaborative consumption field realize that creating trust among both the owner and the renter of property is one of the most important qualities necessary for the growth of trade within such a business model (Botsman & Rogers, 2011)

(Gansky, 2012). For this reason, many collaborative consumption websites have built incorporated trust building mechanisms, such as systems of rankings and verifications, into their websites. These mechanisms aid in facilitating the development of trust between people on the internet who have no connections in the outside world. Many of these systems are similar to the one for Couchsurfing.org, in which both the guest and the host are asked to leave reviews of the stay on the website. (Botsman & Rogers, 2011, p. 179) This is similar to the Airbnb model as well, where future hosts are then able to decide whether or not they would like to have the guest in their home. Another way Airbnb has facilitated trust building for hosts has been to verify addresses of the host accommodations. This can help build trust before the host has had any guests, hopefully encouraging one of the guests to decide to stay with the host for the first time.

(Airbnb)

Another trust building mechanism, and the one which is credited as being one of the largest factors in the growth of Airbnb, is the building of relationships outside of the cyber-world in in offline, real-life introductions. (Airbnb) This is accomplished mainly through “meet-ups” with like-minded individuals that are usually set up through the collaborative consumption business, but at times are organized by general proponents of the movement. (Airbnb)

(OuiShare.net)

ECONOMIC INDICATORS

What exactly is an economy, and how do we measure what is good and bad about it? This question has been perplexing scholars and economists as of late, since it has become fairly evident that the main economic indicators that are used to determine the strength of a county are not necessarily the best means to measure the worth of a country. These indicators, specifically the Gross Domestic Product (GDP) or the Gross National Product (GNP), combined with consumer confidence definitely have their purposes and are valuable tools to help determine the strength of a country, but there are other highly important factors that are ignored if only these two factors are relied upon (Batker & de Graaf, 2011). The topic has been discussed in the government of the United States, and the idea that reform is needed is one of the few bi-partisan supported measurements. But, the question is, what is the best way to measure the economy?

What factors must be considered? There is a new Act in the government of the United States to determine best practices for economic measure within the next eight years. (Batker & de Graaf,

2011) The Key National Indicator System (KNIS) is being developed to help the government better determine the state of the economy based on a more varied system of determinates that will better be able to reflect the current state of economic affairs of a country. The study to determine what will best rate the state of affairs is taking into account many of the factors

previously ignored by macroeconomists, and will hopefully help track issues such as resource management and general well-being of a population. But, exactly what aspects will be considered and how this new system will rate economies will not be determined or implemented for some years (Batker & de Graaf, 2011, p. 24) ( United States Government Accountability

Office, 2011). Until then, we will focus on two of the main current indicators used by the United

States to determine the economic strength of the country, the Gross Domestic Product and consumer confidence.

Gross Domestic Product

The current tool used by most countries to determine the condition of the state of their economy is the GDP. The GDP of a country is “the total market value of all final goods and services produced in a country in a given year.” This measures only the goods that are produced and sold in the country as a final product, and with this form of measurement, there is no concern with imports or exports. (Batker & de Graaf, 2011)

The GDP only became the main economic indicator for measuring the United States economy very recently, when you consider the age of the country. The early United States economy was fairly self-sufficient and only had a very small trade- or market-based economy.

Before the Great Depression, no one was concerned with the amount of output the national economy was generating as a whole. Actually, for the majority of human history, there was no form of measuring the economy on a grand scale. Macroeconomics, or the study of economics on a large scale, was not needed as an understanding of the wealth of a country until well after the industrial revolution, because until then the general public‟s livelihood and lifestyle depended on what was produced in the region in which they lived. Typical people would not

worry about their income or happiness in relation to how many boats were built that year or whether or not everyone in the country was buying a new horse and carriage. The economists of the time were only concerned with supply and demand, a basic microeconomics. (Batker & de

Graaf, 2011)

The first macroeconomic indicator to be developed in the United States was the Gross

National Product, which differed from the GDP by the fact that it would count the product of only businesses owned by United States citizens, whether they were manufacturing their products domestically or abroad. This system worked well for many years while the United

States was still mainly self-sufficient, but with the growth of international trade and overseas manufacturing by domestically owned businesses, there was seen a difficulty with determining the actual worth of product while also considering all of the imports and exports. Because of these factors, by 1991 it was almost impossible to determine the GNP, so the GDP became the new measure of the US economy. (Batker & de Graaf, 2011)

As we have just seen, changes in society, business practices, and consumer culture have necessitated changes to the study of the strength of the economy in years past, and there are plans to change the system in the future, as well (Batker & de Graaf, 2011). Scarcity or abundance of non-renewable resources, the happiness and physical and mental health of the citizens, as well as their ability to have free time are some of the ideas that should be taken into account when discussing the strength of an economy of a country. One aspect that considers a few of these aspects is the confidence of the average citizen of a country at any given time. This rating will be discussed below.

Consumer Confidence

The confidence of the average consumer can be a very strong tool for determining the current strength and the possibility of growth of the economy of any given country. Many factors are taken into account in the development of a ranking system of the typical consumers of a country. The current consumer confidence rating for the United States is compiled and analyzed by the research association called The Conference Board. Founded in 1916, The Conference

Board has been surveying the American public and recording the data for many decades. The consumer confidence index is based on a variety of factors, of which the main ones are consumers‟ perceptions of the current business conditions, the current employment conditions, as well as the perceptions of what the conditions will be like in the coming six months. This combination of factors has shown a large correlation to the growth and spending of the economy for the last few decades. For example, the consumer confidence reflected the recessive state of the economy well in 2009 when it dropped to a record low of 25.3, down from an average of 93 over the few decades preceding that year. (Conference Board, 2012)

For these reasons, in combination with the GDP of a country, consumer confidence will be used in this study as a defining factor of the strength of the country and one of the main influencers of consumer behavior in our current economy.

CONSUMER HISTORY

Introduction

For decades, the modern consumer has been moving away from a consumption of needs and utility, and is now consuming a growing number of items based on pleasure (Campbell,

1999, p. 23) (Baudrillard, 1999, p. 39). This has developed a society of mass consumerism that has grown rapidly since the end of the Second World War, with a particularly large boost in consumerism for pleasure in the two decades starting in 1981 (Cohen, 2003). There are many theories as to why and how western society began such a large growth in the consumer society.

What factors cause people to change their buying habits is an important factor in the development of a new form of business. In the following sections, we will discover whether the change in consumer society of past eras will lend insight into the possible changes of consumer behavior in the current times.

Global Consumer History

Beginning in 1650, the English moved beyond the threat of famine as a worry for daily life. For the first time in modern history, rising food prices were no longer linked with higher mortality rates (Appleby, 1999, p. 130). This moved the general society towards a new form of consumption linked with desires rather than needs (Baudrillard, 1999, p. 39). There have been many theories as to other reasons why western cultures began consuming in a larger scale than what was needed for survival. Consumer historian Colin Campbell believes that the birth of daydreaming in modern man has created an insatiable need to feel positive emotions, and that consuming new goods is a common way of common way of creating such emotions in people

(Campbell, 1999). Economist Thorstein Veblen‟s book from 1899, Theory of Leisure Class, postulated that increasing conspicuous consumption of goods signals wealth and allows consumers to portray a higher social status to those around them. He argued that through consumption, people were attempting to become part of the „leisure class.‟ (Cohen, 2003, pp. 9-

10) Also, it has been noted that as values change, needs change. Jean Baudrillard, another

consumer historian quotes Gervasi as saying, “Choices are not made randomly. They are socially controlled, and reflect the cultural model from which they are produced. We neither produce nor consume just any product; the product must have some meaning in relation to a system of values.” (Baudrillard, 1999, p. 39) This theory helps explain how the values that created a long- standing society of mass consumerists in the United States stemmed from a belief that a high rate of consumerism would be necessary for a higher standard of living for the citizens of the country

(Cohen, 2003, p. 20).

Other theories abound when discussing the reasons people consume as they do. In the eighteenth century, the French author Denis Diderot spoke of his inability to be happy with his old goods once he began to acquire new items. What started as a gift of a dressing gown from a friend turned into a need to improve all of his possessions. He felt that he could no longer be as happy as he was with his old goods, and says he had “become a slave to” his new goods. This consistent need to trade up one‟s possessions has become known as the “Diderot Effect” among today‟s consumer researchers. (Botsman & Rogers, 2011, pp. 24-25)

Jean Baudrillard also references the works of economist John Galbraith and his concept of the “conditioning of needs,” which states that what one person deems necessary is dictated by their society at the time. Galbraith states that this happens primarily through the use of “artificial accelorators” such as advertising and governmental policy. Due to the advancement of unlimited production, the theory states that it would become necessary for consumer demand to be controlled so that it could keep pace with the production. For this reason Galbraith puts forth the theory of a “revised sequence” in which the manufacturers have the control over what the consumers buy. This marks the beginning of the study of consumer culture as a means to

influence consumption by the producers, as well as a relationship between consumption and society that will further our understanding of the growth of modern consumerism. (Baudrillard,

1999, pp. 40-41)

Economic and Political Influence on Consumption

The status of the economy of a country affects the consumer habits of its citizens. The global economic downturn that began in 2008 has changed the way many consumers behave

(Botsman & Rogers, 2011, p. xix). As we discussed above, consumer confidence is at an historic low, and this is creating a large amount of discourse in the public arena regarding growth and spending (Conference Board, 2012). There is, of course, a large amount of debate of how to best fix the current economic crisis, and some people are suggesting changes in consumer behavior as a means for bettering the current economy as a means to gain political power. The argument of taxes and spending is not a new one in the political arena. Political motives for consumerism have a long history in western society (Cohen, 2003). Whether they are from the early days of the French Revolution to the reaction to the Stamp Act in the colonial United States, people have used consumerism as a way to convey their political beliefs and empower themselves (Batker & de Graaf, 2011).

United States Consumer History

Industrial Revolution to Civil War

The Industrial Revolution brought about a massive change in consumption trends across the world. Suddenly, people were no longer reliant on goods that were made by artisans in their proximity, and mass produced goods became more accessible to the general public. While many

people still relied on home-made and home-grown goods and commodities, manufactured goods became a symbol of status and advancement that many people strove to attain (Breen, 1999, p.

109). While some people began to believe that their happiness was determined by the amount of goods they owned, there was an ongoing public debate about morality and the idea of consumerism (Breen, 1999, p. 110). Whether the argument was about social values, such as the

Puritan condemnation of excess, or political values such as the fight against economic enslavement, there were many people who believed that the increases in consumerism were bad for the everyday citizen (Axtell, 1999, p. 86) (Campbell, 1999, p. 19). These arguments in the public discourse undoubtedly helped to stem a possible rapid growth of consumerism in the early

United States. And, while there were often ebbs and flows of the amount of consumerism over the decades, there were still eras of rapid consumer growth, for example in the United States on the eve of the Civil War, when the prices of cotton skyrocketed, and southern planters became very wealthy (Cashin, 2011, p. 350). This antebellum growth was not a long lasting one, as the advent of the Civil War brought about many changes in the lifestyles of the people of the United

States, and consumerism soon dropped to low levels not seen in generations (Cashin, 2011, p.

350).

Turn of the Century to Depression Era

During the beginning of the 20th century there were many changes in the business market of the United States. A large influx of immigrants entered the United States from European countries, which added many workers to the labor force (Heinze, 1999, p. 190). Also, a number of political movements developed in hopes of bettering the lives of the average worker, such as worker‟s rights movements and the beginning of a fight for a living wage for all. (Cohen, 2003)

People‟s livelihoods were bettering and their ability to consume was growing at a faster rate than forty percent increase in the output of food (Leach, 1993, p. 16). The rate of goods being manufactured was growing rapidly, as well, due not only to the increase in people for labor, but also because of innovation in machinery and new fuel sources such as coal and electricity

(Leach, 1993, p. 17). Department stores began to pop up in cities across the country, giving consumers unprecedented access to mass-produced items (Leach, 1993, p. 22). All of these changes caused a new mindset among the average consumer that accepted consumerism as a part of everyday life. Yet, this mindset was soon to change with the advent of the Great Depression following the market crash of 1929 (Cohen, 2003, p. 18).

Consumer behavior took a drastic turn during the Great Depression in the United States.

People stopped spending as freely as they had during the boom-time of the early 1920‟s, and people began to think that it was the end of mass production in the United States (Leach, 1993, p.

377). In reality, while in the beginning of the Depression spending was definitely curbed by the average citizen, movements began to sprout up that were designed to help the country recover from the economic hard times that would encourage spending and consumerism in order to better the economy of the country (Cohen, 2003, pp. 18-20). Two of the main theories of consumer involvement for the betterment of the country will be discussed in the next section.

Citizen Consumer vs. Purchaser Consumer

During the end of the depression era and moving into the beginning of the Second World

War, there were two different theories as to what type of consumer would be most beneficial for the citizens and the government of the United States of America. This was a politically interesting time in the United States, with constant debate amongst scholars, economists and

politicians as to what would be the best way to end the depression and move towards a stronger economic station. Two main ideas came forth as how the consumer should act as to best aid its country in a return to stability. Economic historian Lizabeth Cohen has named these two different types of consumers as the citizen consumer and as the purchaser consumer. Both were theories that relied on the people of the United States to aid its government in restoring economic balance in its country. (Cohen, 2003)

 Citizen consumer – This style of consumer was “responsible for safeguarding the general

good of the nation” through its work policing the marketplace to ensure fair treatment of

consumers as well as through addressing the government with concerns of unfair treatment of

consumers in hopes of influencing regulatory changes in the marketplace. They believed that

by creating a safer market for the consumers, purchasing would increase, which would in

turn spur the economy and increase standards of living for both the consumers and the

producers. (Cohen, 2003)

 Purchaser consumer – This style of consumer was believed to help the greater economy by

buying more goods as opposed to attempting to sway political or governmental opinion.

(Cohen, 2003)

World War Two

In the 1940s, one of the main theories of marketers was led by the idea of the “Economic

Man,” a rational buyer who wants to spend his money on goods that will bring him the most utility. (Zaichkowsky, 1991, p. 52) This theory was widely held at the time and may help explain why there became such a large movement to increase consumption through the development of loans for consumers so that they would be able to purchase what was necessary for them, under

the assumption that consumers would be responsible with their spending and borrowing habits.

The government and banks across the country began to give loans to soldiers returning from the war overseas so that they could achieve the “American Dream” of obtaining their own property, which at the time generally meant a house in the suburbs and a car in the driveway (Cohen, 2003, p. 144).

Another government influence that changed consumption among all classes during World

War II was that the incomes of American workers were taxed with a progressive taxation that aided in reducing the gap between low, middle and high income workers. After the war, taxes were lowered among all of the classes to help encourage spending and increase the “purchasing power” of the average consumer in order to stimulate the post-war economy. This created a society in which all the citizens began to see themselves as having the ability to become part of a growing middle class of consumers in the United States. (Cohen, 2003, pp. 143-145)

Post-World War Two

After World War Two, there was a main switch in the theory and practice of marketing.

Marketers started to make the products that consumers were wanting, as opposed to the products that they wished to make. This was a large difference from the marketing theory of prior years, best summed up by Henry Ford‟s statement that the consumer could have his car in “any color they wanted, as long as it was black.” (Zaichkowsky, 1991) And while advertising was changing rapidly in this era, and helping to change the mindset of the general consumer, the marketers also started to pay more attention to what the consumers wanted. (Leach, 1993) (Zaichkowsky, 1991)

The power of the purchaser consumer as more than a political or economic statement was

beginning to show in the change of mindset of the marketers. (Cohen, 2003) The marketers were realizing that, in order to compete, they must be able to see what the consumers wanted to buy.

Other examples listed in A Consumer‟s Republic of how the government used policy to encourage specific behavior would be the adjustment of the tax code during the reconversion period in post-World War Two United States. For instance, tax codes encouraged consumption, particularly consumption using credit by increasing tax deductions for sales tax, as well as deductions for interest payments, while taxing savings and investment income at a higher level.

(Cohen, 2003, p. 144) This encouraged spending to such a degree that it has been said recently that “the United States has long had one of the most pro-consumption, anti-savings tax codes among the big industrialized countries.” (Bartlett, 1997) Another example of how the government tax structures were used by the United States to encourage behavior of citizens would be the tax breaks afforded to families that only had the husband working and providing for his family, and increased taxes if the wife was also working. This was a large change from the years prior when the government called all women to work in order to save the nation with their labor. (Cohen, 2003, p. 145)

Assertions from popular media such as House Beautiful and Time put forth an image of a world that had an ideal of equality though consumerism as part of the ideological battle against

Communism. Their belief was that Capitalism would cause a great separation in wealth and create a downtrodden group in society, and by maintaining consumer spending, American citizens could show their equality with the rich through their comfortable housing and their family car. Marketing, advertising and propaganda were sometimes indistinguishable during the post-war era and in the early days of the Cold War. For example, a short film by the American

Economic Foundation and paid for in part by Inland Steel Co. and Borg-Warner Corporation showed how if consumers don‟t “freely buy and sell,” then their way of life would be threatened, turning into a Soviet style situation, where homes, jobs and possessions were decided by a powerful government. (Cohen, 2003, pp. 124, 125)

In 1944, President Franklin D. Roosevelt addressed the nation so that he could share the ideals of the New Deal as well as the economic goals of his administration. During his speech, he talked of creating “an American standard of living higher than ever before known.” Roosevelt proposed that the inalienable rights as outlined in the Declaration of Independence were no longer sufficient to create equality, and that “true individual freedom cannot exist without economic security and independence.” He phrased a new list of rights as a “second Bill of

Rights” that could bring security and prosperity for all. Listed in these rights were

“The right to a useful and remunerative job in the industries or shops or farms or

mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give

him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom

from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good

health;

The right to adequate protection from the economic fears of old age, sickness,

accident, and unemployment;

The right to a good education.”

(Batker & de Graaf, 2011)

These rights as listed by Roosevelt showed a large change in the expectations of the

American citizens moving into the post-war era. No longer was it good enough to simply survive in the current economy; it had become necessary to thrive. Between speeches and rallying cries such as Roosevelt‟s and the marketing and propaganda pressures towards consumption as a means for a better life, it is no surprise that mass consumption began to be seen as a means to a better life, not simply because you had more toys, but also because it was for the betterment of the country. You were supplying jobs by consuming; you were doing your duty as an American citizen. (Batker & de Graaf, 2011)

THE EVOLUTION OF ADVERTISING

Many researchers have attributed a large part of the increase in consumption among consumers to a shift in advertising models and its effect on the mindset of the average consumer.

(Woodard, 2012) (Cohen, 2003) (Leach, 1993) Early advertising was a simple form of displaying goods that were available from a vendor, and the first advertising agency was not created until 1877 (Glickman, 1999, p. 3).

In its earliest stages, most advertising consisted solely of text in periodicals, without pictures or illustrations of the products. Any form of visual advertising was considered low-class and in the same realm of circus advertising, such as the ads of P.T. Barnum. Advertising salesmen of the time were regulated to selling text boxes in the backs of periodicals, and were not considered to be marketers in the same sense that they are seen in modern times. (Leach,

1993, p. 41)

With the advent of images in print marketing, advertisers had to determine what would be the best means of selling an item to the masses. This brought about a new form of advertising based not only on selling the product, but also on selling a lifestyle that could be associated with the product that the advertisers were trying to sell (Leach, 1993, pp. 41-43). Advertisements were no longer relegated to the back pages of periodicals, but with the addition of the images of a new way of living, ads were put in prime spots with a large viewing area (Leach, 1993, p. 44). This new inclusion of the ads into the prime spots in periodicals created an influence among consumers that had not been possible with the advertisements of the prior eras, and this facilitated a deeper connection in the minds of the average citizen between consumption and the way of life that one should strive to attain.

In 1956, the past president of the American Marketing Association Wendell Smith spoke of a growing concern over the “expanded array of goods and services” that was “competing for the consumer‟s dollar.” Around this same time, marketers began to study the “why” of consumer behavior, where in the past they had only studied the mass market as a whole. This question brought about a new form of advertising which we know today as consumer segmenting. (Cohen,

2003, p. 293)

PRIMARY RESEARCH ANALYSIS

Introduction

The primary research for the thesis consists of a questionnaire designed to determine whether the status of the economy, specifically, people‟s concern about their current income, would have an effect on whether or not a person would decide to participate in collaborative consumption, and whether or not a better or more stable income status would affect one‟s decision. For these questions we will assume that in a stronger economy the average worker will not be as concerned about their income levels, and will also not be as concerned with the continuity of their income as workers may be in a downturned economic situation, like the one we currently have in the global market. Therefore, if it is determined that income plays a main factor in the decision as whether or not to participate in collaborative consumption, then we may determine that the same people would most likely not continue to participate in collaborative consumption during a stronger economic period during which they would not be as concerned about their income levels in relation to expenditures, and therefore not be as concerned with saving money.

Questions were divided into five sections: four multiple choice questions regarding lodging as a guest, two multiple choice questions regarding lodging as a host, three multiple choice questions regarding tool exchange as a person who rents the goods they need to use, two multiple choice questions regarding tool exchange as a person who has the goods to rent out, and an open-ended comments section where participants were able state their country of residence and also use their own words to describe their reasoning for any of the above answers. The questions were designed to first determine a respondent‟s personal preference of style of transaction. In the case of lodging, two price scales were posited as well. Secondly, the

respondents were asked about the influence of their income on their decisions, or the possibility of reducing costs by receiving a tax break for certain transactions, and whether or not those factors affected their decisions. For the final question per grouping, participants were asked a similar question to the first in the section to see if their decision had changed based on the influence of their income or tax breaks.

Surveys were distributed by email, facebook and twitter links using the survey design and distribution tool SurveyMonkey. There are 120 responses to the questionnaire from a cross- section of people from western countries; the majority of the respondents were residents in the

United States. The countries represented by the responses of the survey are broken down as such: One hundred and eleven from the United States of America, three from Germany, two from Spain, two from France and one from South Africa.

Income and the Economy

The questions of the survey were designed to determine whether a person‟s concern with their current financial situation, and in reflection, their concern with the current economic situation, would reflect in their decision to participate in a collaborative consumption business transaction.

During a downturned economy, as was discussed in the economic indicators section of this paper, it was shown that consumer confidence drops when the economic indicators are showing an unfavorable market. This leads people to purchase fewer items and to search for more cost saving measures.

Section 1

The hypothesis regarding the primary research put forth in the beginning of the paper is that consumers in the current economic downturn would be more likely to decide to use collaborative consumption due to concern about their income, and less likely to continue to use collaborative consumption in a better economic period when they would no longer be as concerned about their income. This hypothesis held true in regards to lodging while traveling for a large percentage of the respondents to the survey. While 40% of participants stated that they would stay with a local person in question 1, the amount rose to 64% in question 2, which posits the same scenario but with a 50% savings for staying with a local person. In the following question, the majority of the respondents answered that income was a factor in the decision as to whether or not to participate in collaborative consumption; it was 53% in both the questions regarding income as a factor in the decision making process. (Appendix, Section 1)

The surprising switch occurs in the fourth question, which posits where the respondent would choose to stay if income were not a factor. In this question, the percentage of respondents choosing to stay with a local person drops dramatically to 17%. It seems as though, by the time the respondents reached the fourth question, they may have had more time to consider their income than they had during the first question. Having their income at the forefront of their minds may be why such a large amount decided to stay in the hotel as opposed to choosing the collaborative consumption option. Also, even though not all of the respondents claimed that money was an issue when deciding which form of consumption to use, the amount of respondents who decided to stay in a hotel as opposed to a person‟s home changed dramatically

when asked where they would stay if money and income were not a concern for them.

(Appendix, Section 1)

Section 2

The questions in Section 2 described the host side of a collaborative consumption lodging situation, and imagined a scenario in which a governmental tax break could be obtained by renting out the spare room. In both questions of this section, the majority of participants answered that they would not be willing to rent out a room in their house to a reputable stranger.

The first question, which simply asked whether or not the respondent would be willing to let out a room to a stranger, only showed a 37.8% response rate saying they would be willing to rent out a room. When asked if a tax break as a form of governmental incentive would influence them to rent out the room, there was a mere 4.6% increase in the amount of respondents that would be willing to rent out a room. This shows a very small percentage of the participants would be initially influenced by governmental tax incentive to participate in collaborative consumption as a host for lodging. As will be discussed below, trust issues are one of the main influences for many of the respondents‟ decisions when it comes to this scenario. (Appendix, Section 2)

Section 3

The questions in the third section of the questionnaire focus on the option of renting or owning tools and household items which are not used on a regular basis. The questions in this section are very straightforward when asking the preference of the consumer, first with how they normally consume when they need a rarely used item, then secondly, what they would do if income were not a factor in their decision. A very large majority of the participants, 83.3%,

responded to the first question of the section that they do not need to own items that they only use on an occasional basis, while only 16.7% stated that they would buy whatever they need.

But, after being asked if income was a factor in their decisions, the number changed significantly. The percentage of respondents that would buy what they needed jumped to almost double what it had been before, up to 29.8%. This shows a statistically significant number of the respondents would rather own their own items than participate in a sharing style economy or a collaborative consumption style business. (Appendix, Section 3)

Section 4

The questions in section 4 were written to find if people would be willing to earn extra income by renting out items which they only used occasionally, and whether or not a governmental incentive in the form of an income tax break would influence their decision. There was a near even split among respondents as to whether or not they would be willing to rent out their items in a collaborative consumption scenario. Of the respondents, 48.3% would be willing to rent out their items, and 51.7% stated that they would not be willing to rent out their items.

Remarkably, when asked if a tax break would influence their decision, only one respondent changed their answer and decided to participate in collaborative consumption, changing the percentages to 49.2% that would rent out items, and 50.8% that would not rent out their items.

This shows that a tax incentive will not be a strong enough incentive in the current market to influence people to participate in a collaborative consumption style business transaction.

(Appendix, Section 4)

Trust

Forty-nine of the one hundred and twenty survey participants responded to the twelfth question, which was the open ended question asking respondents to list any factors that may also affect their decision in the above questions. One of the larger reasons cited in the comments section as for why people would not be willing to participate in collaborative consumption, whether it be in lodging situations or with equipment rental, was trust. The concept of trust was phrased in many different ways amongst the respondents, since this part of the questionnaire was open ended so as to gather responses that were not influenced by question phrasing or answer options. The concept of trust is considered difficult to define even among scholars, and one can use many terms to describe a feeling of unease related to business transactions (Grabner-Krauter

& Kaluscha, 2008). For this reason, many different responses under the comments section will be placed together with trust, due to the relation the vocabulary of the response has to a feeling of unease with the possible transaction. Key words and phrases used by respondents that were considered to relate to trust are listed below.

1) People lie…

2) Concern

3) Security, theft

4) …might not take care of items.

5) Safety

6) Damage/s/d, broken

7) Insurance

8) (references to family safety)

9) Reputable

10) Worry/worried

11) Risk

12) Trust/Trustworthiness

13) Credibility

Using this list of key words while analyzing the comments section of the survey, twenty- three of the forty-nine responses cited trust as a main influence as to why or why not they would choose to participate. This shows a 47% rate of respondents to the twelfth question, which is also

19% of the total respondents, saw trust as a large enough reason to mention in general comments as a reason to not participate in collaborative consumption on a peer to peer basis. (Appendix,

Section 5)

The secondary research has shown that a growing number of consumers are developing a trust for online transactions among strangers, but this survey shows that there is still a statistically significant amount of consumers that are currently unwilling to participate in a sharing-style economy due to trust issues. Research is showing that, through the use of certain trust-building mechanisms such as brand awareness, online rating systems, and certifications by outside agencies of the collaborative consumption businesses may develop a stronger presence in online communities and therefore be able to develop this market segment as a stronger consumer group (Unsal & Erickson, 2008). Therefore, it can be surmised that trust is a significant issue that merits further research in the development of the field of collaborative consumption.

Privacy

Of the forty-nine participants that responded to the twelfth question with the open ended comments section, eleven responded with concerns regarding privacy as a contributing factor of their decision to not use collaborative consumption. Key words and phrases used by respondents that were considered to relate to privacy are listed below.

1) Keep to myself

2) A hermit

3) Privacy

4) Introversion/Introverted

5) Anonymity

6) …not if another person is living there.

While this is only 22% of the group that responded to the twelfth question, and only 9% of the total respondents, this is still a significant amount of respondents who would prefer to use commercial services rather than collaborative consumption for their travel or equipment needs.

While this is a noteworthy number, change in policy or management style of a collaborative consumption business model would not be able to address the privacy needs of such consumers, so this market segment may not be a strong growth market for such businesses. (Appendix,

Section 5)

Miscellaneous Comments

Other responses to the twelfth question regarding reasons for choosing whether or not to take part in a collaborative consumption business transaction were not of a number large enough

to conclude a statistically significant margin that would merit further discussion from this study.

All responses to this question may be found in the Appendix, Section 5, Question 12.

CONCLUSION

As we have seen from the study of the history of consumerism, and through the understanding of the factors that have influenced the customs of modern Americans, there is no one simple way to change the way a society consumes. Many elements, from scientific advancements to social and political influences, have the ability to change the way consumers behave in any given society. Changes in consumer behavior have a tendency to evolve slowly over time depending on this variety of forces, and no single shift in one or another of the areas listed would be able to influence a cognitive shift among the consumers of a country. The growth of collaborative consumption has been stimulated by the downturned economy combined with the technological advancements that have helped bring like-minded individuals together, but this will not be enough to sustain the growth of this new style of consumption when the economy pulls out of the recession and consumer confidence returns to higher levels among the citizens of the United States. The scientific advancements are in place, as we can see with the growth of the internet and mobile technology. Also, social ideals are beginning to turn towards the direction of collaborative consumption, with the growth of the social media as well as a general movement towards environmental sustainability in trade. But, for a true revolution in the consumer styles of the citizens of the United States, there also needs to be one more factor to create a powerful enough force to divert the mindset of the typical American consumer from their current consumer habits to one of collaborative consumption. This new factor would be a push form political forces that would encourage development of this new form of trade.

Until the government understands the necessity of switching to a post-consumer society and begins to create incentives for the American consumer, collaborative consumption will remain a fringe activity of consumers who wish to change their lifestyles, their incomes, and their environmental impact. We still use consumer confidence and Gross Domestic Product as means to rate the strength of an economy. Neither of these rating systems would show a substantial improvement in the market if people were purchasing products through collaborative consumption as opposed to buying new. They are incomplete indicators that would not show the full economic impact of the transaction. For example, say a person decides to rent a power washer through Snapgoods so that they can wash their boat instead of buying one. The GDP would be smaller for that day because the amount of money spent to rent the washer from a peer- to-peer rental place would be less than the money spent to buy their own washer. Also, since only one actual washer was being purchased, the manufacturer would not have to make another washer. While this would lower wages required to employ people to assemble the product, which could be considered a negative impact on social welfare, it would also lower the resources necessary to make the washer, such as the metals for the washer, the electricity needed to run the factory, the raw materials needed to make the washer, and also the fuel needed to ship the washer from the factory to the retailer. All of these things help conserve non-renewable resources, which in turn helps better the welfare of the United States. Until this concept becomes common knowledge amongst policy makers and consumers in the United States, collaborative consumption will not become a mainstream activity readily practiced by the average American consumer.

While this new program is a very promising start for the evolution of the study of what exactly creates a strong country and a healthy economy, and these factors will definitely help

economists and academics better rank the current state of the economy, without action in the form of both education of the consumer as well as governmental incentive programs, such knowledge will not help to change our current business practices.

For this reason, there is not only a need for government regulations to change in order to aid in the growth of this new economy, there is also a need for academics and economists to re- think the outmoded scales of economic strength, and develop a new system that will be able to show the strength of a market without relying so strongly on what consumers are purchasing during any given quarter. One mode of ranking that would be able to encourage sustainability as well as improved design, which would therefore help to increase society‟s usage of collaborative consumption practices, would be to implement a rating system to measure usage hours of items in trade situations. If the government were to encourage companies to manufacture more durable and lasting items, through some form of incentive plan, those items would have a longer usage cycle which would then be able to be used by more people.

Another mode of incentive would be for the government to encourage sharing of resources among owners and users of goods, also as a means to encourage sustainability among the average consumers in the country. This could be achieved by developing tax breaks for individuals who participate in forms of collaborative consumption or other forms of sustainable business practices. We have seen the influence that government incentive programs can have on

American consumers through the encouragement of consumerism during the Great Depression and after World War II (Cohen, 2003, pp. 118-120). The programs may not cause a rapid change in the minds of the consumers, but the idea becomes a part of the general knowledge of the citizens, and therefore has a better ability to become part of the consumer culture.

These forms of government intervention, combined with the increase in social interest and technological advancements, would be able a strong enough combination to stimulate the growth of a sharing economy. The other factors that are necessary for the shift of the consumer culture are already in place. Therefore, the study of the possibility of advancement of these ideas in the political circles of the United States would be an interesting topic for research as a means to help increase the strength behind the collaborative consumption movement.

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APPENDIX Questionnaire

Section One

1. Considering that the cost would be the same - while traveling away from home, would you prefer to stay in a hotel with amenities such as a pool and a restaurant/room service, or in a house with no amenities but with a local person who can show you the „real‟ town you are visiting?

Response Response Answer Options Percent Count Local Person 40.0% 48 Hotel 60.0% 72

2. If you could save up to half the cost by staying with a local, would you be more likely to stay in a hotel with amenities, or in a house with a local person?

Response Response Answer Options Percent Count Local Person 64.2% 77 Hotel 35.8% 43

3. Does your current income affect your decision as to whether you will stay in a hotel or in a house with a local person?

Response Response Answer Options Percent Count Yes, my income affects my decision. 52.9% 63 No, my income does not affect my decision. 47.1% 56

4. If yes, where would you stay if income were not a factor?

Response Response Answer Options Percent Count Local Person 17.1% 19 Hotel 53.2% 59 Not Applicable 29.7% 33

Section Two

5. A stranger online has ten people rating him as a good guest while traveling and a very reputable person. Would you be willing to rent out a spare room in your home to him or her while they are visiting your town so that you could earn some extra income?

Response Response Answer Options Percent Count Yes 37.8% 45 No 62.2% 74

6. What if the extra income earned by renting out the room was not taxed as part of an incentive plan by the government? Would you be willing to rent out your spare room to a reputable stranger for income and a tax break?

Response Response Answer Options Percent Count Yes 42.4% 50 No 57.6% 68

Section Three

7. Is it necessary for you to own goods that you use occasionally, such as a chainsaw or a tent for a party, or would you be willing to rent these items from people in your town you met through an online marketplace such as craigslist or ToolSwapUSA?

Response Response Answer Options Percent Count I like to buy whatever I need. 16.7% 20 I like to rent items I only occasionally need 83.3% 100

8. Does your current income affect your decision as to whether you will buy or rent items that you need occasionally?

Response Response Answer Options Percent Count Yes, my income affects my decision. 52.9% 63

No, my income does not affect my decision. 47.1% 56

9. If yes, what would you do if income were not a factor?

Response Response Answer Options Percent Count Buy whatever I need. 29.8% 34 Rent items I only occasionally need. 43.9% 50 Not Applicable 26.3% 30

Section Four

10. If you own items you only use occasionally, such as a camper van or a lawnmower, would you be willing to rent those items to people you met through an online marketplace such as craigslist or Airbnb.com so that you could earn extra income?

Response Response Answer Options Percent Count I would be willing to rent my items. 48.3% 58 I would not want to rent my items. 51.7% 62

11. What if the extra income earned by renting out the items was not taxed as part of an incentive plan by the government? Would you be willing to rent out your items that you only occasionally used for income and a tax break?

What if the extra income earned by renting out the items was not taxed as part of an incentive plan by the government? Would you be willing to rent out your items that you only occasionally used for income and a tax break? Response Response Answer Options Percent Count I would be willing to rent my items. 49.2% 59 I would not want to rent my items. 50.8% 61

Section Five

12. Please let us know in what country you currently reside.

1) USA 2) USA 3) USA 4) USA 5) USA 6) USA 7) USA 8) USA 9) USA 10) USA 11) USA 12) USA 13) South Africa 14) USA 15) USA 16) USA 17) USA 18) USA 19) USA 20) USA 21) USA 22) USA 23) USA 24) USA 25) USA 26) USA 27) USA 28) USA 29) USA 30) USA 31) USA 32) USA 33) USA 34) USA 35) USA 36) USA 37) USA 38) USA 39) USA 40) USA 41) USA 42) USA 43) USA 44) USA 45) USA 46) USA

47) USA 48) USA 49) USA 50) USA 51) USA 52) USA 53) USA 54) USA 55) USA 56) USA 57) USA 58) USA 59) USA 60) USA 61) USA 62) USA 63) USA 64) USA 65) France 66) USA 67) USA 68) USA 69) Germany 70) USA 71) USA 72) USA 73) USA 74) USA 75) USA 76) Spain 77) USA 78) USA 79) USA 80) USA 81) France 82) USA 83) USA 84) USA 85) USA 86) USA 87) USA 88) USA 89) USA 90) USA 91) USA 92) USA

93) USA 94) USA 95) USA 96) USA 97) USA 98) Spain 99) Booby Land (Germany) 100) Germany 101) USA 102) USA 103) USA 104) USA 105) USA 106) USA 107) USA 108) USA 109) USA 110) USA 111) USA 112) USA 113) USA 114) USA 115) USA 116) USA 117) USA 118) USA 119) USA

13. Please list any other factors that may affect your decisions for any of the above questions.

1) 1-2: Random local? No. Bed and Breakfast? Yes. Hotel employees are ussally locals also... 5-6: People lie on the internet. I'd MAYBE rent to people with references from personal friends. 10-11: I would let friends\neighbors borrow though. 2) Concern about what happens of the renter breaks/damages rented items - who would replace/ repair? Could be a messy situation. 3) Time and convenience of being able to rent items. If it takes too long, easier to just own. 4) Security, privacy for the home rental. Damage and theft for renting items 5) I prefer staying in a hotel over a room in someone's house b/c I'm a quiet person and like to keep to myself. Therefore I would feel awkward in someone's home unless I had a lot of space to myself. As far as renting items to strangers, I don't feel a stranger might not take care of the items. 6) My husband is a hermit. 7) Insurance if home is damaged by renter, or owned items are damaged by renter. 8) If I did not have a child whose safety is at stake I might be more willing to be more adventurous.

9) I have a family and my kids safety would be an issue. 10) other people dont treat your stuff as you would like your stuff treated. 11) Would not rent the room because I have kids, if I were single I would take a chance on the stranger. 12) have a young child at home will effect renting a room 13) Environmental and resource concerns. 14) hygiene, safety, only 10 reviews of a reputable houseguest is not enough, unable to trust strangers inside my home, etc. 15) none 16) To rent out my own living space/ items, I would be worried that renters do not take as good care of them as I would myself. The risk may not be worth the extra income for expensive items. 17) None 18) none 19) Would not rent place, for personal safety, would not rent equipment, for fear of it getting damaged or not returned. 20) As an airbnb host I already let people use all my personal items based on personal reviews. I have never had an issue. I would like to see airbnb be able to be non tax deductible as an incentive from the gov't. I'm allowing my personal items being used in which I'm taking responsibility to replace if broken/missing. 21) I wouldn't want to stay with a stranger, but would be willing to stay in their home if it was unoccupied. Privacy is an issue for me. For renting items, I would not be willing to rent my items because a stranger may damage them, or use them improperly. I would however, rent items to save on space. 22) I prefer hotel privacy 23) privacy is a key consideration for me 24) People suck. Don't trust em. 25) introversion 26) Personal safety of my household; replacement of rented items 27) Income, Time, Reason for travel 28) I prefer to use my own things, if I don't have them I do without 29) Ease of process. Hotels/stores are set up to cater to my needs - Craigslist etc can be a real pain. 30) Price 31) i would rent items i dont use a lot as i dont have a lot of storage space 32) If money was not a factor I would buy tools for others to borrow from me. but with bigger items I do not trust people on craigslist to give them back such as a lawnmower. 33) Traveling with a large group of people 34) I like the anominity of staying at hotels and not feel as if I need to be social to someone that rents a room. I would not want to rent out items bc the potential for damage is not worth the effort or money gained. 35) how long will the visitor be in town? Some items i'd be willing to rent while other I would not, especially if insurance is involved. Safety issues. Trust...is there a place that approves renters and rentees... ie. a governement agency or respectable non-profit that can assure you of people's trust and respect. Some places I may want a guide

while other places it is fun to explore on your own...so this might factor in to whether a hotel or being a guest in someone's house 36) age senior citizen 37) The credibility/personality of the "local person" or people I would be willing to rent my things out to. 38) I would prefer to rent a house rather than a hotel, but not if another person is living there. 39) Not owning my own home or staying in one place for a prolonged period of time. 40) I'm American living in Spain and have limited things where it doesn't make much sense to buy things and I'm a student without extra money. 41) privacy 42) A legally-binding/standardized contract, kind of like landlord/renters agreements in large cities would be beneficial. 43) Condition 44) Trustworthiness of stranger/renter of items 45) i used to loan stuff out. i ended up with lots of broken stuff. 46) I would allow people to borrow my items for free rather than charge them a rental fee. 47) i like the idea of renting a room in my house for income but think that the change in my routine/privacy might make me unwilling to do so... 48) I'm very introverted. 49) 5. and 6. - I don't think I would want a stranger staying in my home with me and my children.