A University of Missouri researcher says people who overuse credit have very different beliefs about products than people who spend within their means. Following a new study, Marsha Richins, Myron Watkins Distinguished Professor of Marketing in the Trulaske College of Business, says many people buy products thinking that the items will make them happier and transform their lives.
"There is nothing wrong with wanting to buy products," Richins said. "It becomes a problem when people expect unreasonable degrees of change in their lives from their purchases. Some people tend to ascribe almost magical properties to goods — that buying things will make them happier, cause them to have more fun, improve their relationships — in short, transform their lives. These beliefs are fallacious for the most part, but nonetheless can be powerful motivators for people to spend."
Richins identified four types of changes that materialistic people expect when making purchases. Previous research has shown that often these expectations are not fulfilled. The four types of transformations expected are:
Transformation of the self is the belief that a purchase will change who you are and how people perceive you. This is commonly held by young people and people in new roles. For example, a woman interviewed for the study wanted to have cosmetic dental surgery because she thought it would improve her appearance and self-confidence.
Transformation of relationships is the expectation that a purchase will give someone more or better relationships with others. For example, a woman interviewed for the study wanted to buy a new home because she thought it would enable her to entertain more often and make more friends.
Hedonic transformation implies that a purchase will make life more fun. For example, a man in the study wanted a mountain bike because he thought it would give him more incentive to get out and go on "an adventure."
Efficacy transformation is the expectation that purchases will make people more effective in their lives. For example, some study participants wanted to buy a vehicle because they thought it would make them more independent and self-reliant.
People who have strong and unrealistic transformational beliefs are more likely than others to overuse credit and take on excessive debt. According to Richins, this finding highlights a limitation of financial literacy and credit counseling programs. She recommends that financial literacy and credit counseling programs be revised to help people better understand their motivations for purchasing goods and to help them recognize that products are not a quick fix for improving their lives.
"Many financial literacy programs seek to prevent people from getting into financial problems by presenting the facts about interests rate and loans," Richins said. "However, few programs seek to directly influence behavior or focus on why people purchase things they cannot afford and go into debt."
Richins conducted research through in-depth interviews and a national survey with respondents varying across income levels and demographic measures. The study, "Materialism, Transformation Expectations, and Spending: Implications for Credit Use," will be published in the fall by the Journal of Public Policy and Marketing, but it is available online at www.marketingpower.com/AboutAMA/Pages/AMA%20Pub lications/AMA%20Journals/Journal%20of%20Public%20Policy%20Marketing/JPPMForthcoming.aspx
Christian Basi | EurekAlert!
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik
Physicists from the University of Würzburg are capable of generating identical looking single light particles at the push of a button. Two new studies now demonstrate the potential this method holds.
The quantum computer has fuelled the imagination of scientists for decades: It is based on fundamentally different phenomena than a conventional computer....
An international team of physicists has monitored the scattering behaviour of electrons in a non-conducting material in real-time. Their insights could be beneficial for radiotherapy.
We can refer to electrons in non-conducting materials as ‘sluggish’. Typically, they remain fixed in a location, deep inside an atomic composite. It is hence...
Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.
Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...
An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...
In the race to produce a quantum computer, a number of projects are seeking a way to create quantum bits -- or qubits -- that are stable, meaning they are not much affected by changes in their environment. This normally needs highly nonlinear non-dissipative elements capable of functioning at very low temperatures.
In pursuit of this goal, researchers at EPFL's Laboratory of Photonics and Quantum Measurements LPQM (STI/SB), have investigated a nonlinear graphene-based...
24.05.2017 | Event News
23.05.2017 | Event News
22.05.2017 | Event News
24.05.2017 | Physics and Astronomy
24.05.2017 | Physics and Astronomy
24.05.2017 | Event News