Featured Research

from universities, journals, and other organizations

When self-esteem is threatened, people pay with credit cards

Date:
May 6, 2011
Source:
SAGE Publications
Summary:
People shop for high status items when they're feeling low, and they're more likely to make those expensive purchases on credit, according to a new study.

People shop for high status items when they're feeling low, and they're more likely to make those expensive purchases on credit, according to a study in the current Social Psychological and Personality Science (published by SAGE).

Related Articles


When a person's ego is threatened -- by doing poorly on a task, by being told they're not as good as they hoped -- people sometimes repair their self-worth by purchasing luxury goods. Because actually parting with cash can be psychologically painful, researchers Niro Sivanathan of the London Business School and Nathan Pettit of Cornell University studied whether people might be more likely to use a credit card when feeling badly about one's self.

The researchers had people work on an ambiguous computer test, and then told half of them that their "spatial reasoning and logic ability was in the 12th percentile," which is a scientific-sounding way of telling them they're not very smart. They told the other half that they were in the 88th percentile, a perfectly fine performance. When asked how they might pay for "a consumer product that you have been considering purchasing," people who'd had their ego threatened were substantially more likely to say they were planning on paying on credit.

In a follow-up study, Sivanathan and Pettit asked 150 college students to think about buying a pair of jeans. Half were told to consider a pair of exclusive, high status designer jeans, while the rest were told to think about normal, everyday jeans. The students then went through the same computer test, and were told they had done poorly or well. The self-esteem threat made people willing to pay almost 30% more for the luxury jeans, and were more than 60% more likely to intend to purchase the jeans with a credit card.

Does threat make any purchase look good, or are luxury items particularly good at repairing self-esteem? The students who thought about everyday jeans did not increase how much they would pay for regular jeans when threatened, and the threat did not change their willingness to use credit over cash. Luxury items are especially effective at reassuring us of our value.

People are likely to resort to credit after threat to consume luxury goods, despite the interest and fees associated with consumer credit. Seeking luxury after threat, the researchers note, is a normal response. These studies are part of a psychological account of how relaxed lending policies -- for example high interest mortgage offers aimed at consumers of low socioeconomic status -- can have disastrous consequences.


Story Source:

The above story is based on materials provided by SAGE Publications. Note: Materials may be edited for content and length.


Journal Reference:

  1. N. C. Pettit, N. Sivanathan. The Plastic Trap: Self-Threat Drives Credit Usage and Status Consumption. Social Psychological and Personality Science, 2010; 2 (2): 146 DOI: 10.1177/1948550610385138

Cite This Page:

SAGE Publications. "When self-esteem is threatened, people pay with credit cards." ScienceDaily. ScienceDaily, 6 May 2011. <www.sciencedaily.com/releases/2011/05/110505181541.htm>.
SAGE Publications. (2011, May 6). When self-esteem is threatened, people pay with credit cards. ScienceDaily. Retrieved January 26, 2015 from www.sciencedaily.com/releases/2011/05/110505181541.htm
SAGE Publications. "When self-esteem is threatened, people pay with credit cards." ScienceDaily. www.sciencedaily.com/releases/2011/05/110505181541.htm (accessed January 26, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Monday, January 26, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

How Technology Is Ruining Snow Days For Students

How Technology Is Ruining Snow Days For Students

Newsy (Jan. 25, 2015) — More schools are using online classes to keep from losing time to snow days, but it only works if students have Internet access at home. Video provided by Newsy
Powered by NewsLook.com
Weird Things Couples Do When They Lose Their Phone

Weird Things Couples Do When They Lose Their Phone

BuzzFeed (Jan. 24, 2015) — Did you back it up? Do you even know how to do that? Video provided by BuzzFeed
Powered by NewsLook.com
Smart Wristband to Shock Away Bad Habits

Smart Wristband to Shock Away Bad Habits

Reuters - Innovations Video Online (Jan. 23, 2015) — A Boston start-up is developing a wristband they say will help users break bad habits by jolting them with an electric shock. Ben Gruber reports. Video provided by Reuters
Powered by NewsLook.com
Amazing Technology Allows Blind Mother to See Her Newborn Son

Amazing Technology Allows Blind Mother to See Her Newborn Son

RightThisMinute (Jan. 23, 2015) — Not only is Kathy seeing her newborn son for the first time, but this is actually the first time she has ever seen a baby. Kathy and her sister, Yvonne, have been legally blind since childhood, but thanks to an amazing new technology, eSight glasses, which gives those who are legally blind the ability to see, she got the chance to see the birth of her son. It&apos;s an incredible moment and an even better story. Video provided by RightThisMinute
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