RATIONAL INTEGRATIVE MODEL OF ONLINE CONSUMER DECISION

MAKING
Padmini Patwardhan and Jyotika Ramaprasad
ABSTRACT: Based on traditional rational consumer theories about beliefs preceding intent to act and knowledge preceding
behavior, this study proposed, and empirically tested, a hierarchical path model of decision making in the online environment,
focusing on the Internet's role in two decision stages: pre-purchase search and evaluation, and actual purchase. Both direct and
indirect effects were posited in the sequential model using four Internet related variables: pre-purchase search beliefs, purchase
beliefs, actual pre-purchase search, and actual purchase.
The empirical test was conducted among consumers in the United States and India with 291 respondents taking the online survey
(186 for the United States, 105 for India). For both U.S. and Indian respondents, each conceptualized stage of online decision
making was significantly impacted by the stages preceding it, either directly or indirectly. In terms of direct effects, an antecedent
Internet belief variable (pre-purchase search beliefs) impacted a consequent belief variable (purchase beliefs), and an antecedent
action variable (pre-purchase search) impacted a consequent action variable (purchase). Further, the consequent belief variable
(purchase beliefs) impacted the immediately following antecedent action variable (pre-purchase search). In terms of indirect
effects, all antecedent variables impacted consequent variables at each stage of the model.

The applicability of traditional models to the e-shopping

process is still a new area of study, with some (e.g. Hoffman
and Novak 1996) holding that traditional decision making
patterns will prevail and others (e.g. Peterson,
Balasubramanian, and Bronenberg 1997) suggesting that they
are likely to change. Within the context of such discussion, the
purpose of this study was to propose a rational model of
online decision making and empirically examine the
application of rational hierarchy theories to the Internet
environment. The cross-cultural applicability of this study's
proposed model was also explored by surveying Internet users
in countries at different stages of e-shopping adoption: the
United States and India.
Many traditional consumer decision-making models are based
on the assumption that the consumer is rational and adaptive
(Moorthy, Ratchford, and Talukdar 1997). These models
propose a series of mental and motor steps (Howard and
Sheth 1969) that envisage decision making as progressing from
problem/need recognition, through information search and
evaluation and purchase decision, to post purchase behavior
(Schmidt and Spreng 1996). The various models that have
emerged differ slightly in the number of steps (Haubl and
Trifts 2000) and the nomenclature used for the steps, but at
their core they maintain a knowledge-attitude-behavior
sequence (Lavidge and Steiner 1961). Such an approach
assumes a rational, goal-oriented approach to decision
making, as the consumer moves from awareness and
knowledge (cognitive stage) to liking and preference (affective

stage) to conviction and purchase (conative stage) (Aaker and

Myers 1982).
Criticism of linear and staged rational models has led us to
understand that the product, consumer, buying situation, and
other factors may not only reverse or change the hierarchy (in
any possible combination), but also result in abbreviated or
expanded hierarchies (see e.g., Crozier and McLean 1997;
Sheth 1974). Ray (1973) suggests that three combinations
appear to represent a majority of the situations: 1) the rational
hierarchy (cognitive, affective, conative), often called the
learning hierarchy because of its behavioristic approach, 2) the
dissonance attribution hierarchy (conative, affective,
cognitive), and 3) the low-involvement hierarchy (cognitive,
conative, affective). Miracle (1987) adds the dependency
hierarchy (affective, cognitive, conative) for Japanese
television commercials.
In addition, MacKenzie and Lutz's (1989) theory of consumer
preference formation also assumes a rational sequence, where
beliefs inform attitudes and attitudes inform intent to act.
Beliefs are information (true or otherwise, based on fact or
opinion) that consumers have about an object (Duncan and
Olshavsky 1982; Petty and Cacioppo 1981), while attitudes are
evaluative (like/dislike) and are based on this information.
Beliefs have received considerable attention in multi-attribute
models of consumer preference formation.
Because the Internet appears to lend itself to such decisionmaking, a conceptual model was developed bringing these
JournalofInteractiveAdvertising,Vol6No1(Fall2005),pp.213.
2010AmericanAcademyofAdvertising,Allrightsreserved
ISSN15252019

JournalofInteractiveAdvertising

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rational theories together (where knowledge precedes behavior

and beliefs precede intent to act). Consumer use of the
Internet is generally assumed to be more purposive and goaldirected, and therefore more "rational," at least at this point in
time. In addition, online shoppers are far more likely to
operate under conditions of higher involvement presaging
more active information seeking and processing (Petty and
Cacioppo 1981, 1983). In the rational model, pre-purchase
search is followed by purchase. The Internet collapses in one
medium the search for information and the act of purchasing,
making it a perfect venue for the operation of this study's twostage rational model. In online shopping contexts, consumers'
need for information is large because of the lack of real
interaction with the product, because such information is
easily available on the Internet, and because the Internet also
allows direct purchase. The Internet's vast capacity for
information storage, search and retrieval, information
customization, and interactive communication makes it an
efficient medium for accessing, organizing, and
communicating information (Peterson, Balasubramanian, and
Bronnenberg 1997). Informational use of the Internet can
significantly reduce pre-purchase anxiety among consumers
(Ghose and Dou 1998) and pre-purchase sales information
appears to be a major part of a web site's value (Bruner 1997).
Thus potential informational benefits include increased search
efficiency, better product evaluation, and enhanced
transaction convenience (Zeng and Reinartz 2003).
The empirical test of the conceptual model was conducted for
online consumers in both the United States and India,
presenting an opportunity to test the cross-cultural validity of
the proposed model among consumers at different stages of
Internet and e-shopping adoption. Specifically at the time of
the study, overall Internet penetration in the two countries
stood at 62% of the total U.S. population and 16% of the
Indian population, while e-commerce penetration stood at
32% of American Internet users and about four percent of
Indian Internet users (TNS Interactive-Global eCommerce
Report 2002). The U.S. Department of Commerce reported
online retail transactions by American consumers in the year
2001 at U.S. $33.7 billion (Pastore 2002). Comparable figures
for India stood at about U.S. $100 million (Rs. 450 crores) in
1999-2000, of which retail and business-to-consumer
transactions constituted only about U.S. $11 million (Rs. 50
crores) (Times of India 2000).
The rationale underlying the choice of India was multi-fold.
First, while decision models are routinely tested using
American consumers, theory-driven studies of Indian

consumers are practically non-existent. Second, economic

liberalization since the 1990s has seen a shift from socialism to
capitalism in India which, in turn, is fostering a culture of
consumer spending similar to that of more developed
societies. Third, India's largest export to the United States is its
pool of computer technology professionals and it may not be
wrong to assume that Internet users in India are reasonably
familiar with various online activities, whether they shop
online or not. Finally, there is some evidence to suggest that
Indians have begun leapfrogging the digital divide and
Internet users in that country are using online resources to
inform their purchase decisions (Patwardhan 2003).
Conceptual Path Model of Rational Decision Making
Several barriers to actual online purchase have been reported,
including consumer concerns and transaction anxiety
(Korgaonkar and Wolin 1999), payment security and
distribution issues, perceptions of informational rather than
transactional value of the Internet (Zeng and Reinartz 2003),
lack of face-to-face contact in online shopping (Times of India
2000), as well as product factors like need for physical
experience (e.g., perfumes) and complexity of purchase (e.g.,
real estate). However, it is equally evident that e-shopping is
becoming an increasingly global phenomenon with over 15%
of global Internet users transacting online, and 18% intending
to do so in the next six months (TNS Interactive-Global
eCommerce Report 2002). In many consumer surveys,
convenience, interactivity, and shopping ease are often
mentioned as primary reasons for the growth of consumers' eshopping activities (Ghose and Dou 1998; GVU survey 1998;
Korgaonkar and Wolin 1999). While some consider only the
final act of buying a product online as defining the
transactional nature of e-shopping, others include an entire
range of activities from purchase-related information searches,
use of price and brand comparison tools, use of online
coupons and discounts, and interaction with marketing
personnel via web sites, to actual purchase and post-purchase
use of the Internet. This expansive definition of online
purchase activities can be broken down into three basic, staged
components of consumer decision making--pre-purchase
search and evaluation, actual use/purchase, and post-purchase
interaction.
This study modeled two of the three decision stages within the
e-shopping context: pre-purchase search and evaluation, and
actual purchase. Using the rational hierarchy of effects model
(Lavidge and Steiner 1961) where knowledge precedes

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behavior, it proposed the following relationship as the first

conceptual step in model building:

Based on the consumer preference formation model, each of

the two stages above was further conceptualized as a pair of
belief-action variables. Since beliefs have theoretically been
considered to precede use (Duncan and Olshavsky 1982;
MacKenzie and Lutz 1989), each belief variable was posited to
precede its related action. Thus beliefs about the Internet's
potential for pre-purchase search and evaluation (prepurchase search beliefs) and actual pre-purchase search and
evaluation (pre-purchase search) were the cognition
(knowledge) stage variables, and beliefs about the Internet's
potential for purchase (purchase beliefs) and actual purchase
(purchase) were behavior stage variables. The model was
expanded to propose the following relationships:

The final step in the conceptual model building was

integrating these traditional theories to propose the following
rational path model of relationships between the variables. In
the model, both belief variables precede action variables, and
both search related variables precede action related variables.
Figure 1. Path Model of Rational Decision Making for
Online Purchases

The hypotheses (direct effects) and research questions

(indirect effects) paralleled the paths outlined in the diagram.
The primary focus of this study was to test, using path
analysis, our model's applicability to online purchase decisionmaking. The study put the model to test in two countries for
stringency and to assess the model's cross-cultural validity. As
a result, the study's hypotheses and research questions do not
focus on differences between countries, but on relationships,
direct or indirect, between variables in both countries.
Direct effects are that part of the total effect that is not
transmitted through intervening variables (Alwin and Hauser
1975), while indirect effects are that part of the total effect that
is transmitted by mediating variables. Hypotheses were
proposed for direct effects because these may be, and were,
tested using a series of standard regression analyses following
Pedhazur (1982) and Alwin and Hauser (1975). Research
questions were posited for indirect effects because these may
be examined only descriptively (Goldsmith, Lafferty, and
Newell 2000) due to lack of a statistical test of significance.
Our first hypothesis proposed a relationship between the
study's two belief variables: pre-purchase search beliefs and
purchase beliefs. While linear hierarchies do not specifically
address belief-belief relationships, research on attitudes
suggests that an antecedent attitude (e.g. attitude toward the
ad) often impacts a consequent one (e.g. attitude toward the
brand). Following this line of thinking, we hypothesized the
two belief variables in our study to be directly related. Since we
assumed a linear, staged sequence of rational decision making,
the direction of the relationship was determined to be from
pre-purchase to purchase. Our first hypothesis proposed that:
H1a: Pre-purchase search beliefs positively and directly
influence purchase beliefs.
The next four hypotheses proposed paths between beliefs and
actions. Following Duncan and Olshavsky's (1982) argument
that, at a minimum, beliefs and actions will be consistent, both
belief variables were seen as directly related to both actions in
the hierarchy.
H1b: Pre-purchase search beliefs positively and directly
influence pre-purchase search.
H1c: Pre-purchase search beliefs positively and directly
influence purchase.

HYPOTHESES AND RESEARCH QUESTIONS

H2a: Purchase beliefs positively and directly influence

pre-purchase search.

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H2b: Purchase beliefs positively and directly influence

purchase.
Our final hypothesis dealt with a behavior-behavior (actionaction) relationship: pre-purchase search and purchase. A
rationale similar to H1a (linear, rational decision-making) was
used to propose a path from pre-purchase action to purchase
action:
H3: Pre-purchase search positively and directly influences
purchase.
Apart from forcing researchers to explicate theory with regard
to the sequence of relationship(s) among variables rather than
simply testing linear relationships, what distinguishes path
analysis from a multiple regression analysis is its ability to
represent and calculate indirect effects (Alwin and Hauser
1975), thus ensuring that the influence of a causal variable is
not underestimated. In the tradition of Pedhazur (1982) and
Alwin and Hauser (1975), indirect effects were examined
through the following research questions:
RQ1a: To what extent do pre-purchase search beliefs
positively and indirectly influence pre-purchase search
through an effect on purchase beliefs?
RQ1b: To what extent do pre-purchase search beliefs
positively and indirectly influence purchase through an
effect on purchase beliefs as well as an effect on prepurchase search?
RQ2: To what extent do purchase beliefs positively and
indirectly influence purchase through an effect on prepurchase search?
METHOD
This research employed a questionnaire which was
administered via a web site to a sample of U.S. and Indian
consumers.
Population and Sample
The survey population was U.S. and Indian consumers with
email/Internet access because the focus of the study was online
purchase behavior. Hence consumers without Internet access
were consciously excluded. The sampling process did not take
into consideration the populations of the two countries largely
because Internet penetration and use were vastly different in
terms of the percentage of the population that had access.
Previous researchers surveying online populations have made
use of both convenience and purposive samples. While
thousands of user databases are commercially available from

online and offline sources for payment, no comprehensive

national lists of online consumers are freely available, one of
the major problems in generating probability samples of
Internet users. Following Sheehan and Hoy (1999), with some
departures, this study deployed a geographic parameter based
on stratification of the country to obtain a sample of
consumers with Internet access. To ensure randomness, all
U.S. states were first assigned to different geographic zones
based on their general location: North, South, East, West, and
Central. Two states were randomly picked from each zone,
providing a set of 10 states. Names of the states were then
entered, one at a time, into the Yahoo People Search engine.
At the time of sampling, each state-wise search generated 75
email addresses, although this search method is no longer
available on Yahoo. While geographic stratification and
random selection of states from the strata were used, it is
unknown whether the 75 email addresses were generated
randomly for each state. Further, the population from which
these names were generated is also unknown. The emails were
then manually entered into a directory created by the
researchers, providing a list of 750 email addresses. Due to a
low initial response, five more U.S. states (one from each zone)
were subsequently sampled without replacement to generate
an additional 350 email addresses.
A similar procedure was followed for India, although only one
state from each of five geographic regions (India has half the
number of states compared to the United States) was
randomly selected to generate an Indian sample of 375.
Second round sampling for India (similar to the U.S. process)
had to be abandoned. Yahoo failed to return a sufficient
number of email addresses from other randomly selected
Indian states, sometimes returning none. Thus a pool of less
than fifty email addresses was returned in the second round.
We next attempted to resample from the Indian states selected
in the first round. The same email addresses were returned,
rendering the re-sampling useless. Emails to Yahoo seeking
clarification yielded no response. Admittedly, this sampling
method had limitations.
An invitation to participate in the survey was delivered via
email to respondents, with a link to the survey website. The
email explained the purpose and nature of the study, the time
required to complete the survey, and the researchers'
affiliations. An opt-out option and anonymity assurances were
also provided.

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Measurement
Conceptual definitions of the four major variables were as
follows. Pre-purchase search beliefs were beliefs about the
Internet's potential forgathering and evaluating reliable and
comprehensive product and purchase related information
with ease and speed. Purchase beliefs were beliefs about the
Internet's potential for product purchase with security,
convenience, ease, and enjoyment. Actual pre-purchase search
was use of the Internet for retrieving and evaluating product,
price, service and other purchase related information, and
actual purchase was use of the Internet for making product
purchases and related actions such as using online discounts.
The questionnaire design went through several qualitative and
one quantitative iteration based on the results of a pilot test.
Apart from questions on demographics (age, gender,
education, income) and Internet use (years of Internet use,
daily hours online), the questionnaire included scales for the
two belief and two behavior variables (see Appendix)
developed by the authors using the following procedure. A
pool of face valid scale items was first generated from
literature and through discussion. Scale items were
administered in a pre-test to a convenience sample of Internet
users from a university population that included both
American and Indian students (n = 80). Factor analysis
(varimax rotation) and reliability testing was conducted to
purify the scales. Single factor solutions with eigenvalues
above one emerged for all four variables supporting construct
unidimensionality. Cronbach's alphas were: pre-purchase
search beliefs (.85), purchase beliefs (.90), pre-purchase search
(.93) and purchase (.91). Thus all scale items were retained for
the final questionnaire. During final survey administration,
post -test reliabilities were as follows, presented by country:
pre-purchase search beliefs U.S. (.85) and India (.84), purchase
beliefs U.S. (.90) and India (.91), pre-purchase U.S. (.77) and
India (.86), and purchase U.S. (.91) and India (.92).
FINDINGS
Altogether, 1,500 email messages were sent out to the U.S.
(750 first mailing, 350 second mailing) and Indian (375)
sample. A total of 509 email messages were returned as
undeliverable (422 for the U.S. sample, 97 for the India
sample), and five respondents sent email messages declining
participation, reducing the generated sample size to 986. A
total of 291 respondents took the survey (186 for the U.S., 105
for India) on the web site, for a response rate of 19% for the
U.S. and 28% for India. However, because the survey site was
subsequently listed on an Indian listserv by an interested

respondent, and access to the web site was not controlled, the
response rate must be interpreted with caution because the
unsolicited listing prevented estimation of accurate response
rate from the original sample.
Description of Sample
Indian Internet users in the survey were somewhat older
(average age 39 years) than their U.S. counterparts (average
age 37 years) (Table 1). Exactly half (50%) of U.S. respondents,
and a little over half (56.4%) of Indian respondents, were in
the 25-40 age group. Interestingly, those below 25 years
constituted the smallest segment of Internet users among U.S.
respondents (14.4%), while the above 40 age group (10%) was
the smallest segment among Indian respondents.
While better balance among male (55.4%) and female (41.9%)
users was observed for the U.S. sample, male users (66.7%)
outnumbered female users (29.5%) for the Indian sample. In
terms of education, more than half (51.1%) of U.S.
respondents were college graduates, 25% were in college, and
another 18% had completed high school. Among Indian
respondents, about half (51.4%) were college graduates, 34%
were in college, and another four percent had completed high
school (Table 1).
In terms of Internet experience and use, on average, U.S.
respondents had used the Internet for about five to six years
(m = 5.63, s.d. = 2.99), while Indian users had used it for about
four years (m = 3.86, s.d. = 2.01). Interestingly, average daily
Internet use suggested that Indian users were online for longer
daily durations (m = 3.44 hours, s.d. = 3.34) than U.S.
respondents (m = 2.91 hours, s.d. = 2.32) (Table 1).

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Table 1. Respondent Profile and Mean Scores* by Country

Both U.S. (m = 2.3, s.d. = .56) and Indian (m = 2.2, s.d. = .74)
Internet users had fairly positive and strong beliefs about the
Internet's potential for pre-purchase search and evaluation
(lower value = more positive belief on a scale of 1 to 5) (Table
1). However, their beliefs about its potential for product
purchase were more or less neutral: U.S. users (m = 3.0, s.d. =
.53), Indian users (m = 3.1, s.d. = .62). Both U.S. (m = 2.8, s.d.
= .84) and Indian (m = 2.9, s.d. = 1.0) users reported slightly
greater than average use of the Internet for pre-purchase
search evaluation. However, when it came to actual online
purchase, U.S. users reported buying online "sometimes" (m =
3.1, s.d. = 1), while Indian users seldom shopped online (m =
3.6, s.d. = 1.2) (Table 1).
PATH ANALYSIS RESULTS
Direct Effects
The strength of the path from pre-purchase search beliefs to
purchase beliefs for U.S. consumers ( = .618, p = .00)
suggested that the former had a direct and significant
influence on the latter (Figure 2 and Table 2). Such a direct
effect ( = .608, p = .00) was observed for Indian consumers as
well (Figure 2 and Table 3). Hypothesis 1a was, therefore,
supported. Regression analysis also showed that pre-purchase
search beliefs significantly predicted 38% of the variance in
purchase beliefs (F = 113.8, p = .00) for U.S. consumers and
37% (F = 60.45, p = .00) for Indian consumers.

Figure 2 Results of Path Analysis of the Rational Decision

Making Model for Online Purchases

The path from pre-purchase search beliefs to pre-purchase

search was significant for both countries' consumers (U.S.: =
.466, p = .00; India: = .315, p = .00) (Figure 2 and Tables 2
and 3). That is, pre-purchase search beliefs positively and
directly predicted pre-purchase search for both groups of
consumers. Hypothesis 1b was, therefore, supported.
The effect of pre-purchase search beliefs on purchase was not
significant for either U.S. or Indian consumers. This suggests
that, for both groups, beliefs about the Internet's information
potential did not significantly predict their online purchasing.
Hypothesis 1c was, therefore, not supported.
The paths from purchase beliefs to a) pre-purchase search, and
b) purchase were significant for both countries' consumers
(U.S.: = .216, p = .00; = .407, p = .00; India: = .335, p =
.00; = .400, p = .00) (Figure 2 and Tables 2 and 3). That is,
purchase beliefs positively and directly predicted pre-purchase
search as well as actual purchase in both groups of consumers.
Hypotheses 2a and 2b were, therefore, supported.
A significant direct, positive path was also found from prepurchase search to purchase for both U.S. ( = .478, p = .00)
and Indian ( = .348, p = .00) consumers (Figure 2 and Tables
2 and 3). This suggests that, for both groups, pre-purchase
search had a direct, positive impact on purchasing. Hypothesis
3 was, therefore, supported.
Indirect Effects
For RQ1a, an indirect path from pre-purchase search beliefs to
pre-purchase search was found through purchase beliefs for
both U.S. ( =.135) and Indian ( =.204) consumers (Tables 2
and 3). However, for both groups, the direct effect was
stronger than the indirect effect.

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For RQ1b, indirect paths from pre-purchase search beliefs to

purchase were found for both U.S. and Indian consumers
through i) purchase beliefs (U.S.: = .252; India: =.243), ii)
pre-purchase search (U.S.: =.223; India: =.110), and iii) the
two combined (U.S.: = .064; India: = .071) (Tables 2 and
3). For both groups, therefore, pre-purchase search beliefs
exerted an indirect effect on purchase. Thus while prepurchase search beliefs did not directly predict purchase, they
did exert an indirect influence on purchase through mediating
variables.

Table 3. Interpretation of Significant Effects in Path Model

of Rational Decision Making for Online Purchases (Indian
Consumers)

For RQ2, purchase beliefs had an indirect influence on

purchase through pre-purchase search for both U.S. ( = .103)
and Indian ( =.117) consumers (Tables 2 and 3). However,
for both groups, the direct effect was greater than the indirect
effect.

Table 2. Interpretation of Significant Effects in Path Model

of Rational Decision Making for Online Purchases (U.S.
Consumers)

Results of the Revised Path Model

A judgmental criterion of meaningfulness (e.g., a regression
coefficient < .05) is used by researchers to delete paths even if
coefficients are significant, particularly when it is suspected
that with a large sample size substantively meaningless
regression coefficients may be found to be significant
(Pedhazur 1982). In this study, only the non-significant path
(pre-purchase search beliefs to purchase) was eliminated for
theory trimming because all significant coefficients appeared
to be relatively healthy.
Because only the last stage of the model (the regression of
purchase on the three other variables) was affected by the nonsignificant path, only the last stage of the path analysis was rerun excluding pre-purchase search beliefs as a direct predictor
of purchase. The revised path diagram and results are
presented in Figure 3. All remaining paths continued to be
significant though weights went down slightly.

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Figure 3. Revised Path Model of Rational Decision Making

for Online Purchases

impacted by the stages preceding it, either directly or

indirectly, for both the U.S. and Indian respondents.

DISCUSSION

Some general conclusions can be drawn from the above

analysis. It was argued that the rational model might be
particularly well-suited to Internet-based consumer purchases
because of consumers' need for information in an online
buying situation where the product is not physically available
for inspection, and because of the tremendous potential of the
Internet for information in terms of amount of availability of
information and ease of retrieval of this information.
Respondents confirmed the latter by rating the medium quite
high on potential for information search and around midpoint
for actual information search. (Such a drop at each stage of
decision making models is typically expected. Also, access
related constraints could be responsible for the lower rating
for actual retrieval as compared with potential for retrieval).

Based on the sequential predictive relationships empirically

observed through this study, it may be concluded that the
mental and motor steps (Howard and Sheth 1969) of online
purchase decision-making may be explained using hierarchical
models. The fact that the findings were identical across two
rather different cultures at different stages of Internet
adoption provides further reinforcement to the conclusions.
The lack of one direct path does not change the model's basic
hierarchies, and the rerun of the model without the nonsignificant path did not change results much, further
confirming the conclusions.
For both countries, with one exception, all direct paths, i.e.,
effects, in the sequential, rational consumer decision-making
model were statistically significant. Thus, pre-purchase search
beliefs led to purchase beliefs, which led to pre-purchase
search, which, in turn, led to purchase. In addition, prepurchase search beliefs led to pre-purchase search, and
purchase beliefs led to purchase. Only pre-purchase search did
not directly lead to purchase.
For both countries, this time without exception, all indirect
paths, i.e., effects, were present. Pre-purchase search beliefs led
to purchase through purchase beliefs and pre-purchase search.
Also, purchase beliefs led to purchase through pre-purchase
search. Finally, pre-purchase search beliefs led to pre-purchase
search through purchase beliefs.
While the direct path from pre-purchase search beliefs to
purchase was not significant, the indirect path was. In sum,
each stage of the online purchase decision-making process as
conceptualized in this study's path model was significantly

It was also argued that the rational model might be well-suited

to online consumer purchases because of the Internet's
potential for direct purchase by consumers. In fact, it may be
that the Internet, more than any other direct marketing
medium, has the greatest potential for actual purchase because
of ease and ability to create a virtual shopping experience.
However, while our respondents were generally positive about
the Internet's purchase utility, some restraint and caution was
evident at the actual purchase stage. Considering the concerns
regarding online security and privacy, as well as practical
issues regarding transacting online in India (e.g. less prevalent
credit card usage and online payment gateways), the limited
purchase action is not surprising.
It appears that the basic rational online decision model
proposed in this study (defined in terms of traditional
knowledge-behavior and beliefs-action hierarchies) is a viable
one, regardless of the stage of Internet and e-shopping
adoption. In addition, when effects are compared, some very
interesting conclusions emerge to further our knowledge of
rational hierarchies. First, each antecedent belief better
predicted the action most closely related to itself. Thus, in the
Internet environment, pre-purchase search beliefs positively
influenced pre-purchase search and purchase beliefs
influenced purchase. Second, an antecedent belief predicted a
consequent belief better than it predicted a consequent action.
In fact, the strongest effect in the model was of one belief
variable on another. In both countries, for total (direct and
indirect) effects, pre-purchase search beliefs had the largest
effect on purchase beliefs, the second largest effect on pre-

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purchase search, and the lowest on purchase. This is an

interesting finding.
Some of the limitations of this study are as follows. Response
rate for the study was small. Based on the fact that studies with
low response rates are the norm for online surveys of general
Internet users, this study's response rate may be deemed
acceptable. Comparison of respondent characteristics with
Internet population demographics for both the U.S. (GVU
Survey 1998) and India (NASSCOM 2000) suggested that the
samples were fairly representative, with the single exception of
age for Indian respondents. Indian respondents in the sample
were somewhat older than the general Internet user
population in India. Still, because a true random sample could
not be used (a practical impossibility when surveying general
Internet populations), the results from this study's sample
must be interpreted with caution.
Purchase was measured as an interval, not ratio, level measure
to capture a range of purchase-related actions. Despite
differences in accessibility, adoption, and e-commerce
availability levels, a ratio level measure may be a more valid
measure of online purchasing activity.
While quite strongly supported by theories of consumer
decision making processes and by the theoretical basis of
decision support systems research (Haubl and Trifts 2000;
Pereira 1999), the path model used in this study did not
represent all stages of a rational model. Particularly, the
exclusion of the attitudinal stage in both the knowledgebehavior and beliefs-action sequences is a limitation. Inclusion
of this stage may have provided greater explanation of
variance in the model. As already pointed out, the sequence
adopted by consumers is not necessarily always rational; that
is, information search may not always precede purchase and
beliefs may not always precede action.
Further, the theoretical underpinning of this study--the
rational hierarchy--is generally applied to a specific purchase
(find out about a product, develop an attitude, and then make
a purchase); this study does not do that. By not referencing a
specific purchase, questions about the links between the stages
may arise. For example, it may be argued that consumers may
make use of several information channels that may or may not
include the Internet (for example, call an 1-800 number or talk
to a dealer) even if their purchase is made online; or
consumers may collect information from the Internet even if
their purchase is made offline. The exclusion of the interaction
of offline searches and offline purchasing with online search
and purchase is therefore a limitation.

The path model proposed in this study is a simple linear one.

More complex models may be proposed and tested in future
research, adding mediating stages (e.g. attitudinal) or
including moderating variables (e.g. consumer expertise) that
may affect the strength of the conceptualized relationships. In
addition, the online shopping environment has evolved
considerably (both positively and negatively) since this study
was conducted. The development of new online shopping
resources and tools (e.g. independent consumer feedback and
advice pages, consumer blogs, sophisticated information
search tools) are likely to impact decision making as are new
concerns about identity theft and hacking.
CONTRIBUTION
Theory testing and development is this paper's primary
contribution. Its proposition and empirical validation of a
hierarchical theoretical model as applied to online consumer
decision making extends the scope of rational models to the
Internet. This study is also cross-cultural providing validity to
both the method and the findings. Also, by calculating and
presenting indirect effects, it exploits one of the major
advantages of path analysis, the ability to separate out the
relative direct and indirect contribution of each independent
variable in explaining the respective dependent variable, and
thereby also assessing the total effect. Specifically, the
contribution of pre-purchase search beliefs to explaining
purchase indirectly would have remained undiscovered if only
direct paths had been examined, and the analysis of effect sizes
would have been misleading if total effects had not been
gauged. The study also uncovered empirical evidence of
connections between beliefs indicating that, in the rational
decision making process, beliefs at one stage may have a
positive direct effect on beliefs at a subsequent stage. This is a
finding of some interest and merits further consideration.
Finally, from a measurement perspective, the new scales
created to operationalize the four variables used in the study
demonstrated fairly high reliability and may be employed in
future research.
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APPENDIX: Online Consumer Decision Making Scales

Pre-purchase Search Beliefs
(Five point scale from Strongly Agree to Strongly Disagree)
The Internet is a valuable source of product information
Internet-based information helps in making wise purchase
decisions
The Internet helps people become better consumers
The Internet provides quick and easy access to product
information.
Searching for information online is an inexpensive way to
learn about products.
The Internet is a useful tool to make brand comparisons

"TNS Interactive-Global eCommerce Report" (2002, June),

<http://www.tnsofres.com/ger2002/keyfindings/index.cfm>
(accessed on 7/2002).

Web-based information about products is unreliable

Zeng, Ming and Werner Reinartz (2003), "Beyond Online

Search: The Road to Profitability," California Management
Review, 00081256, Winter, 45 (2).

Web advertising is a valuable source of product information

ABOUT THE AUTHORS

Padmini Patwardhan, assistant professor, Department of
Mass Communication, Winthrop University, has teaching and
research interests in Internet-related issues, international
advertising/public relations/communication, and media
dependency effects. She has published in Gazette, Journal of
Communication Management, Journal of Interactive
Advertising, American Journalism, and Journal of Website
Promotion.
Jyotika Ramaprasad is Associate Professor in the School of
Journalism, SIUC. She has teaching and research interests in
international communication and national development and
her travels in pursuit of these interests include Asia and Africa.
Her work has been published in (among others) Gazette,
Journalism Quarterly, Journal of Advertising, and Journal of
Advertising Research.

Searching for purchase related information online is a waste of

time.

Web sites provide all the information consumers need to buy a

product.
Purchase Beliefs
(Five point scale from Strongly Agree to Strongly Disagree)
Placing an order on the Web is too complicated
Buying on the Web is more impersonal than shopping in a
store.
Buying on the Internet takes all the trouble out of shopping.
The Internet is a one-stop shop for everything
It's difficult to judge product quality while shopping online
Transaction security is a major concern in online shopping
Buying on the Web gives consumers more flexibility to shop
when they want, where they want
The Internet is not the best place to buy all products
Buying on the Web is faster than going to a store

NOTES
Authors' names are arranged alphabetically by last name. A
version of this manuscript won the top research paper award
in the Advertising Division at the AEJMC national
convention, Kansas City, MO, August 2003.

Shopping on the Internet is a convenient way to buy products

Shopping on the Web is an enjoyable experience
Consumers should be cautious about buying products on the
Internet
It's cheaper to buy products on the Web

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JournalofInteractiveAdvertising

Pre-Purchase Search
(Five point scale from Very Frequently to Never)
I visit Web sites to check out the best deals
I search for detailed information about the brand or product
category
I compare several brands online before making a decision
I check out relevant Web ads to get more information about a
product
I check out Web sites for sales and service information
I look for product information that is specific to my
requirements
I check out company information online for products I would
like to buy
I look for online discounts and bargains
Purchase
(Five point scale from Very Frequently to Never)
I shop on the Internet
I buy many different products on the Internet
I make use of online discounts on goods and services
I follow up on good deals on the Internet
I buy a product online even if other buying options are
available

Fall 2005