How consumer confidence affects price conscious behavior: The roles of financial vulnerability and locus of control

•We aim to reconcile debate about the usefulness of consumer confidence (CC) indices.•Contrary to prior research, we show that CC is not a singular construct.•National CC affects price consciousness via personal CC and financial vulnerability.•Locus of control moderates the effect of national CC on financial vulnerability.•Implications relate to forecasting, marketing, and financial education/counselling. Despite their ubiquity in academic and commercial research, evidence of the usefulness of consumer confidence indices is mixed. To contribute to this debate, we examine the psychological mechanisms through which consumer confidence does (and does not) affect consumer behavior. We develop a conceptual model, which we test via structural equation modelling and moderated mediation analysis, using data from a sample of US consumers (n = 1,090). Rather than conceptualize consumer confidence as a single construct, our study is the first to distinguish between national consumer confidence and personal consumer confidence. Consistent with cognitive appraisal theory, personal consumer confidence mediates the relationship between national consumer confidence and perceived financial vulnerability, which in turn leads to increased price conscious behavior. Drawing on attribution theory, we find that external locus of control enhances the effects of national consumer confidence. We provide practical advice to economic forecasters, business analysts, marketers, and financial educators.