Sarah wants to buy an expensive car, but she’s concerned about how her relatives will react. They are more frugal, and she’s concerned that they might think less of her for spending so much money. Which type of risk is this

Social risk

Explanation:

Social Risk is a type of Percieved Risk in Consumer, this type of risk deals with a consumer’s social status. Given an individual or consumer is of a high or wealthy social class, he or she will want to buy products that their friends would also buy.

For example, a customer, may decide not to buy a cheap car for fear that their friends would disapprove or that it might impact their social status among their peers.

Similarly, a customer may chose to buy cheaper products instead of their desired products, so as to get sense of approval from their peers or relatives

Hence, in this case, Sarah is considering or taking a Social risk, as she does not want to be labelled by her relatives as someone who is not frugal, while she desires the expensive car.