Measuring internet product purchase risk

The purpose of this paper is to develop and validate a scale to reliably capture the variance of perceived risk towards purchasing on the internet at the product level.

A two‐dimensional scale to measure internet Product Purchase Risk (IPPR) was developed and tested in three studies. In the first study a preliminary pool of items was generated with evidence of content validity. In the second study the IPPR scale was purified using principal axis factor analysis. In the third study evidence of criterion‐related, known‐group, nomological, and discriminant validity was demonstrated.

The IPPR scale was found to successfully capture the variance of evaluation judgement and internet security risk. IPPR was also found to have a quadratic relationship with experience purchasing a product category from the internet.

Although strong evidence to suggest construct validity was demonstrated, it is understood that efforts to establish the validity of new measures should be ongoing. Specifically, although the IPPR scale was shown to produce reliable‐measurements for seven different products, the measurement of IPPR across more product categories would strengthen evidence of generalizability.

Given that risk is strongly dependent on the type of product, the procedure to develop the IPPR scale demonstrates the importance of measuring risk at the product category level.

This is the first study to develop and rigorously validate a multi‐item measure of purchase risk at the product level. Given the importance of risk in understanding online consumer behaviour, the IPPR scale will be useful for future studies in this domain, especially for comparing findings.