BUFFALO — Horatio Alger would be proud. A recent study finds that having a firm belief in the American Dream may lead to an increased ability to not spend impulsively.
The study, conducted by academics at the University at Buffalo and Johns Hopkins University, was published in the Journal of Marketing Research. It sought to see the effects of embracing the idea that hard work improves one’s economic status when it comes to shopping.
“When materialistic people believe they have the power to change their financial circumstances, they’re more likely to save money and focus on long-term success, rather than the short-term pleasure of having the latest technology or products,” Sunyee Yoon, PhD, assistant professor of marketing in the UB School of Management, and one of the co-authors says in a release.
To reach this conclusion, researchers split up a mix of college students and adult consumers into two separate groups. One group was presented news stories that catered to the belief that economic mobility is possible, while the other group was fed the inverse. They conducted this study four times.
What the researchers found was that feeling hopeless about moving up the economic ladder was correlated with a lack of control over impulse spending. Those who felt as if they could control their destiny through factors such as hard work and persistence, however, were markedly less likely to spend frivolously.
It should be noted that these more “responsible” consumers were still willing to splurge, albeit only when the purchases could help them achieve their financial goals. (Think a nice blazer and dress shirt for an interview at a prestigious law firm.)
Yoon argues that firms and non-profits may want to begin encouraging the reduction of consumer debt by appealing to this notion of control, amid an epidemic of splurging. “Research shows that three in four Americans have made impulse purchases, and that the average American saves less than 5 percent of his or her income,” she explains. “Our findings show one way public service campaigns could try to moderate excessive spending.”
At the same time, Yoon understands that the American Dream may hold little significance for individuals in other countries; thus, she has called for similar studies to be conducted abroad.