Featured Research

from universities, journals, and other organizations

Tightwads Outnumber Spendthrifts: Spending Can Be A Pain To Some

Date:
March 17, 2008
Source:
University of Chicago Press Journals
Summary:
We all have a friend who can't seem to save, constantly splurging on new shoes or the latest gadgets. But, contrary to persistent media coverage of overspending and under-saving, a recent international survey of more than 13,000 shoppers suggests that chronic under-spending is far more widespread than originally thought. In fact, the study reveals that tightwads outnumber spendthrifts by a 3 to 2 ratio.

We all have a friend who can't seem to save, constantly splurging on new shoes or the latest gadgets. But, contrary to persistent media coverage of overspending and under-saving, a recent international survey of more than 13,000 shoppers suggests that chronic under-spending is far more widespread than originally thought. In fact, the study reveals that tightwads outnumber spendthrifts by a 3 to 2 ratio.

The study by Scott Rick (University of Pennsylvania), Cynthia Cryder, and George Loewenstein (Carnegie Mellon University) reveals that tightwads save, not because they care more about the future than spendthrifts, but because forking out the money is too painful of an emotional experience.

Therefore, those who experience the pain of spending money more intensely tend to spend less than they would ideally like to spend. On the other end of the 'Spendthrift-Tightwad' scale, spendthrifts typically experience minimal pain when spending money and tend to spend more than they would ideally like to spend.

"Spending differences between tightwads and spendthrifts are greatest in situations that amplify the pain of paying and smallest in situations that diminish the pain of paying," the researchers explain. "The evidence suggests that frugality is driven by a pleasure of saving, as compared with tightwaddism, which is driven by a pain of paying."

The researchers also found that tightwads and spendthrifts differ demographically:

  • Females are no more likely to be tightwads than spendthrifts, but males are nearly three times more likely to be tightwads than spendthrifts.
  • Respondents under the age of 30 were only slightly more likely to be tightwads than spendthrifts, but respondents over 70 were five times more likely to be tightwads than spendthrifts.
  • Whether one is a spendthrift or a tightwad also predicts a wide range of spending behavior, the researchers found. Spendthrifts are no more likely than tightwads to use credit cards, but spendthrifts who use credit cards are three times more likely to carry debt than tightwads who use credit cards.
  • Annual income differs little between tightwads and spendthrifts, suggesting that the observed differences in debt are largely driven by differences in spending habits.

Interestingly, the researchers also found that tightwads are also most sensitive to marketing ploys designed to reduce the pain of paying. In one experiment, participants were asked whether they would be willing to pay $5 to have DVDs shipped overnight. The cost was either framed as a "$5 fee" or a "small $5 fee." Spendthrifts were completely insensitive to the manipulation, but tightwads were 20 percent more likely to pay the fee when it was less painfully presented as "small."

"The research provides a new perspective on spending and saving money. Whereas traditional economic theory assumes that the propensity to spend or save is largely determined by the degree to which one cares about the future, this research suggests that spending and saving are driven, at least in part, by more immediate emotional concerns," the researchers write.

The researchers administered the scale to more than 13,327 people, including 10,000 readers of The New York Times.

Journal reference: Scott I. Rick, Cynthia E. Cryder, and George Loewenstein. "Tightwads and Spendthrifts" Journal of Consumer Research: April 2008.


Story Source:

The above story is based on materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Cite This Page:

University of Chicago Press Journals. "Tightwads Outnumber Spendthrifts: Spending Can Be A Pain To Some." ScienceDaily. ScienceDaily, 17 March 2008. <www.sciencedaily.com/releases/2008/03/080317095619.htm>.
University of Chicago Press Journals. (2008, March 17). Tightwads Outnumber Spendthrifts: Spending Can Be A Pain To Some. ScienceDaily. Retrieved September 2, 2014 from www.sciencedaily.com/releases/2008/03/080317095619.htm
University of Chicago Press Journals. "Tightwads Outnumber Spendthrifts: Spending Can Be A Pain To Some." ScienceDaily. www.sciencedaily.com/releases/2008/03/080317095619.htm (accessed September 2, 2014).

Share This




More Mind & Brain News

Tuesday, September 2, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Can You Train Your Brain To Eat Healthy?

Can You Train Your Brain To Eat Healthy?

Newsy (Sep. 1, 2014) New research says if you condition yourself to eat healthy foods, eventually you'll crave them instead of junk food. Video provided by Newsy
Powered by NewsLook.com
Coffee Then Napping: The (New) Key To Alertness

Coffee Then Napping: The (New) Key To Alertness

Newsy (Aug. 30, 2014) Researchers say having a cup of coffee then taking a nap is more effective than a nap or coffee alone. Video provided by Newsy
Powered by NewsLook.com
Young Entrepreneurs Get $100,000, If They Quit School

Young Entrepreneurs Get $100,000, If They Quit School

AFP (Aug. 29, 2014) Twenty college-age students are getting 100,000 dollars from a Silicon Valley leader and a chance to live in San Francisco in order to work on the start-up project of their dreams, but they have to quit school first. Duration: 02:20 Video provided by AFP
Powered by NewsLook.com
Baby Babbling Might Lead To Faster Language Development

Baby Babbling Might Lead To Faster Language Development

Newsy (Aug. 29, 2014) A new study suggests babies develop language skills more quickly if their parents imitate the babies' sounds and expressions and talk to them often. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins