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Beliefs about whether spending implies wealth

Kappes, Heather Barry, Gladstone, Joe J. and Hershfield, Hal H. (2020) Beliefs about whether spending implies wealth. Journal of Consumer Research. ISSN 0093-5301 (In Press)

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Abstract

Spending is influenced by many factors. One that has received little attention is the meaning that people give to the act of spending. Spending money might imply that someone is relatively wealthy—since they have money to spend—or relatively poor—since spending can deplete assets. We show that people differ in the extent to which they believe that spending implies wealth (SIW beliefs). We develop a scale to measure these beliefs and find that people who more strongly believe that spending implies wealth spend their own money relatively lavishly and are, on average, more financially vulnerable. We find correlational evidence for these relationships using objective financial-transaction data, including over 2 million transaction records from the bank accounts of over 2,000 users of a money management app, as well as self-reported financial well-being. We also find experimental evidence by manipulating SIW beliefs and observing causal effects on spending intentions. These results show how underlying beliefs about the link between spending and wealth play a role in consumption decisions, and point to beliefs about the meaning of spending as a fruitful direction for further research.

Item Type: Article
Official URL: https://www.ejcr.org/
Additional Information: © 2020 The Authors
Divisions: Management
Subjects: H Social Sciences > HB Economic Theory
Date Deposited: 20 Nov 2020 11:27
Last Modified: 20 Nov 2020 11:27
URI: http://eprints.lse.ac.uk/id/eprint/107482

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