LONDON — The financial savviness of low-income individuals may hinge on their personality traits. A new study finds that the spending patterns of poorer people vary depending on whether they’re introverted or extraverted.
Researchers at University College London in the UK examined the expenditures of 718 bank patrons over the course of a year, hoping to obtain insights on how many variables, such as income and personality, affected purchasing habits.
Participants, who enrolled voluntarily, were also instructed to complete an assessment measuring one’s leanings on the Big Five personality traits (i.e., openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism).
Using purchase data, the researchers were able to categorize different types of spending, placing some expenditures into a “high-status” category (e.g., foreign air travel, electronics, etc.) and others into a “low-status” category (e.g., pawnbrokers, salvage yards, and discount stores).
Matching this data to personality-related data, the researchers found that low-income extraverts spent much more on high-status items that their introverted counterparts.
“Our findings suggest that extraverts compensate for having low income by spending more on items and experiences that reflect higher status,” says lead author Blaine Landis in a Association for Psychological Science press release. “In other words, individuals’ spending patterns may reflect personality differences in how they respond to having low income.”
These findings held even after other variables, including age, employment status, and debt and savings levels, were controlled for.
“These people had the same financial resources and/or budget available to them, but our data show that they spent this money in very different ways,” says Landis.
While there is little evidence that these same findings also apply to those with more disposable income, this trend is interesting to observe.
For the first time, there is evidence that income and personality traits interact in influencing purchasing decisions, the researchers note.
Still, there is the possibility that the sample size used does not represent the broader population, they also acknowledge.
Ultimately, the authors’ hypothesis, based on the notion of “compensatory consumption,” turned out to be accurate.
The study’s findings were published in the journal Psychological Science.
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