Overspending on smartphone purchases among Swedish young adults

Figures & data

Table 1 Fictitious expert evaluations of the smartphones.

Smartphone A New premium model that is one of the best deals in the market. Top class performance. Big but still easy to handle because of its rounded corners. New technical features are improved battery life, stereo speakers and water proof. Has dual cameras, one with wide-angle lens and one with telephoto lens allowing for optical zoom. Top image quality. Available in black, gold, silver, and pink gold. For this smartphone you pay / the cash price of SEK 7920. / SEK 260 per month in 2 years. / Costs for telephone calls, text messaging, and internet surfing are not included.

Smartphone B This new premium model’s performance is not far behind the more advanced model, but it has a smaller display with lower resolution although the same screen brightness. Has a new but less advanced camera that delivers good image quality. Battery life is the same. Not waterproof. Available in black, gold, silver and pink gold. For this smartphone you pay / the cash price of SEK 6920. / SEK 230 per month in 2 years. / Costs for telephone calls, text messaging, and internet surfing are not included.

Smartphone C Is the most advanced of earlier premium models with lower performance and shorter battery life. Has the same screen as the new premium model but lower screen brightness. Camera with acceptable image quality. Not waterproof. Available in space grey, gold, silver and pink gold. For this smartphone you pay / the cash price of SEK 6000. / SEK 200 per month in 2 years. / Costs for telephone calls, text messaging, and internet surfing are not included.

Smartphone D The less advanced of the earlier premium models with the same performance and battery life. Has the same smaller screen as the new model next to the most advanced premium model but with lower screen brightness. Camera with acceptable image quality. Not waterproof. Available in space grey, gold, silver and pink gold. For this smartphone you pay / the cash price of SEK 5040. / SEK 170 per month in 2 years. / Costs for telephone calls, text messaging, and internet surfing are not included.

Smartphone E Budget smartphone. Has all features as the more advanced smartphones but lower performance. Same battery life as the older models. Smaller display with lower resolution and screen brightness. Not waterproof. Available in space grey, gold, silver and pink gold. For this smartphone you pay / the cash price of SEK 4080. / SEK 140 per month in 2 years. / Costs for telephone calls, text messaging, and internet surfing are not included.

Note. The expert evaluations were presented twice. The slashes refer to that either the cash price or the monthly instalment was presented the first or second time in counterbalanced order.

Table 2 Percentage and mean choice of smartphone, mean total cost, and mean preference rating.

Smartphone (Cash price/Monthly cost in SEK^a)	Replace (n = 74)		Upgrade (n = 78)
	Cash price	Instalment	Cash price	Instalment
A (coded 5) (7920/260)	35.1%	47.3%	35.9%	43.6%
B (coded 4) (6960/230)	21.6%	21.6%	16.7%	20.5%
C (coded 3) (6000/200)	14.9%	12.2%	20.5%	20.5%
D (coded 2) (5040/170)	12.2%	6.8%	14.1%	9.0%
E (coded 1) (4080/140)	16.2%	12.2%	12.8%	6.4%
Choice of smartphone [M, (SD)]	3.47 (1.48)	3.85 (1.40)	3.49 (1.43)	3.89 (1.25)
Total cost SEKa [M, (SD)]	6454 (1423)	5412 (1009)	6468 (1373)	5418 (904)
Preference rating (1-9) [M, (SD)]	5.28 (2.31)	5.49 (2.28)	5.35 (2.36)	5.54 (1.97)

Note. M = Arithmetic mean; SD = Standard deviation.

a 1 SEK approximately equal to 0.12 USD or 0.10 Euro.

Table 3 Unstandardized coefficients (b), standard errors (SE), t-statistics and associated p values from OLS linear regression analyses.

	Dependent variable
	Difference in choice between instalments and cash				Difference in preference ratings between instalments and cash				Preference for smartphone paid in instalments
Independent variable	b	SE	t	p	b	SE	t	p	b	SE	t	p
Installments versus Cash price	0.38	0.12	3.16	.002	0.20	0.16	1.23	.221	0.31	0.18	1.66	.100
Upgrade (1) versus Replace (-1)	−0.01	0.12	−0.02	.986	0.00	0.16	0.00	.993	0.04	0.18	0.21	.837
Attitude to borrowing (1-9)^a	−0.07	0.07	−0.94	.350	−0.21	0.10	−2.09	.040	−0.12	0.12	−1.00	.321

a Mean centered.

Table 4 Means and standard deviations (within parentheses) of post-choice ratings related to upgraded versus not upgraded choice of earlier versus latest models of smartphone paid in instalments of discounted cash prices.

	Not upgraded		Upgraded
Dependent variable	Earlier models (C, D) (n = 25)	Latest models (A, B) (n = 60)	Earlier models (C, D) (n = 12)	Latest models (A, B) (n = 41)
Satisfaction with purchase (1-9)	5.56a (2.18)	6.33a (1.88)	4.25b (1.66)	4.95ab (1.94)
Payment strain (1-9)	5.52a (2.06)	5.76a (1.95)	5.56a (1.74)	5.94a (1.73)
Latest model (1-9)	5.68a (2.34)	6.30a (2.16)	4.50b (2.24)	5.29ab (2.08)
Low price (1-9)	5.92a (2.02)	5.50ab (1.73)	6.42ac (1.73)	6.15abc (1.57)
Peer liking (1-9)	3.24a (2.65)	3.57a (2.61)	3.25a (2.67)	3.39a (2.46)

Note. Means in each row sharing subscripts do not differ significantly in independent t-tests at p<.05.