Why do Americans who are deeply in debt continue to spend? The idea of retail therapy has been proven: when we feel badly or powerless, we’re more likely to spend more money. A study at Northwestern University used a study of three experiments to confirm this. Participants were asked to describe a time in which they held power over someone else or a time in which someone else held power of them. After, the researchers showed them pictures of objects and asked how much money they would be willing to pay for them. The subjects who recalled situations in which they felt powerless were more willing to spend more money on things that signaled status like fur coats, but they weren’t willing to spend more on neutral objects like dryers. The increased willingness to pay more for an item that signals higher status comes from the belief that these things will give them the powerful feeling that they lost. People are using purchases to make them feel better about themselves and compensate for their insecurities, but this kind of a coping strategy can be extremely costly.
Written by Lisa Drake
Article: http://www.sciencedaily.com/releases/2008/06/080625193859.htm
Image: http://www.freedigitalphotos.net/images/
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