Featured Research

from universities, journals, and other organizations

Time Isn't Money: Study Finds That We Spend The Resources Differently

Date:
March 18, 2008
Source:
University of Chicago Press Journals
Summary:
Economists usually treat time like money -- as another scarce resource that people spend to achieve certain ends. Money is used to pay for things like furniture and plane tickets; time is spent assembling the do-it-yourself bookshelf or searching for cheap flights on the Internet. But despite the old adage, the two are far from psychologically equivalent -- particularly when it comes to consumer spending decisions.

Economists usually treat time like money -- as another scarce resource that people spend to achieve certain ends. Money is used to pay for things like furniture and plane tickets; time is spent assembling the do-it-yourself bookshelf or searching for cheap flights on the Internet. But despite the old adage that time is money, the two are far from psychologically equivalent, reveals a new study -- particularly when it comes to consumer spending decisions.

Related Articles


In a series of experiments, Ritesh Saini (George Mason University) and Ashwani Monga (University of Texas, San Antonio) demonstrate that a qualitatively different form of decision making gains prominence when consumers work with time instead of money. Specifically, consumers thinking about expenditure of time are more likely to rely on heuristics: intuitive, quick judgments based more on prior experience than on analysis of the information presented.

For example, one experiment had participants consider the purchase of a used car. They were told that a search on a used-car website had yielded 80 cars meeting their criteria but that viewing each accident record would take either $1 or 5 minutes of time. They were then asked how many records they would like to view, with a catch: the researchers used classic experimental "anchoring" techniques to manipulate the answers.

Participants were asked whether they would view "up to 2" or "up to 40" records, before indicating the specific number of records they would view. The use of an anchor, for those thinking in terms of time expenditure, turned out to have a significant impact.

When the anchor value was high in the time condition, consumers chose to view an average of 23.7 accident reports, versus 9.1 when the anchor value was low. The number of records consumers in the money condition chose to view was statistically the same, irrespective of whether the anchor value was high or low.

"People face difficulties in accounting for time because they do not routinely transact in time as they do in money," explain the researchers. "Although people in some professions (e.g., lawyers) do keenly monitor their time expenditures, most other people are not trained to do so."

Furthermore, by measuring response times--the time taken by participants to arrive at decisions--the researchers find supporting evidence for the idea that quick and easy heuristics are used more in time than in money.

"These results suggest that businesses need to be aware that decisions regarding products and services might be made differently if consumers spend their time rather than money," Saini and Monga explain. "Unlike money which is unambiguous--a dollar is a dollar in all circumstances--the value of time changes from one situation to another."

Journal reference: Ritesh Saini and Ashwani Monga, "How I Decide Depends on What I Spend: Use of Heuristics Is Greater for Time than for Money." 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. "Time Isn't Money: Study Finds That We Spend The Resources Differently." ScienceDaily. ScienceDaily, 18 March 2008. <www.sciencedaily.com/releases/2008/03/080317095622.htm>.
University of Chicago Press Journals. (2008, March 18). Time Isn't Money: Study Finds That We Spend The Resources Differently. ScienceDaily. Retrieved February 27, 2015 from www.sciencedaily.com/releases/2008/03/080317095622.htm
University of Chicago Press Journals. "Time Isn't Money: Study Finds That We Spend The Resources Differently." ScienceDaily. www.sciencedaily.com/releases/2008/03/080317095622.htm (accessed February 27, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Friday, February 27, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

The Best Foods to Battle Stress

The Best Foods to Battle Stress

Buzz60 (Feb. 26, 2015) If you&apos;re dealing with anxiety, there are a few foods that can help. Krystin Goodwin (@krystingoodwin) has the best foods to tame stress. Video provided by Buzz60
Powered by NewsLook.com
Sleeping Too Much Or Too Little Might Increase Stroke Risk

Sleeping Too Much Or Too Little Might Increase Stroke Risk

Newsy (Feb. 26, 2015) People who sleep more than eight hours per night are 45 percent more likely to have a stroke, according to a University of Cambridge study. Video provided by Newsy
Powered by NewsLook.com
Mayor Says District of Columbia to Go Ahead With Pot Legalization

Mayor Says District of Columbia to Go Ahead With Pot Legalization

Reuters - News Video Online (Feb. 25, 2015) Washington&apos;s mayor says the District of Columbia will move forward with marijuana legalization, despite pushback from Congress. Rough Cut (no reporter narration). Video provided by Reuters
Powered by NewsLook.com
Marijuana Nowhere Near As Deadly As Alcohol: Study

Marijuana Nowhere Near As Deadly As Alcohol: Study

Newsy (Feb. 25, 2015) A new study says marijuana is about 114 times less deadly than alcohol. 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:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

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