Associations between protestant work ethic and multilevel marketing participation and financial outcomes

Abstract

Multilevel marketing (MLM) involvement can adversely affect consumer wellbeing. We examine how individual beliefs about work predict participation and financial losses in MLMs. As MLMs are presented to the marketplace as low-barrier opportunities to start one's own business, we suggest that this may speak directly to people who strongly endorse Protestant work ethic (PWE), making them more inclined toward MLM participation, and financial outcomes associated with that participation. Using a place-based (county level) MLM data set from the Federal Trade Commission (FTC; n = 326,487), and a consumer survey (n = 515), we find evidence that PWE is positively associated with participation in MLMs (studies 1 and 2), and that PWE predicts estimated financial losses among those who lost $1000 or more (study 1) but financial gains in a more general sample of MLM participants (study 2). Implications for research, marketing, and consumer advocacy are discussed.

Keywords

• Multilevel marketing
• Individual differences
• Protestant work ethic