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!
Corporate coworking as a driver of innovation
22.11.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
MPQ scientists achieve long storage times for photonic quantum bits which break the lower bound for direct teleportation in a global quantum network.
Concerning the development of quantum memories for the realization of global quantum networks, scientists of the Quantum Dynamics Division led by Professor...
Researchers have developed a water cloaking concept based on electromagnetic forces that could eliminate an object's wake, greatly reducing its drag while...
Tiny pores at a cell's entryway act as miniature bouncers, letting in some electrically charged atoms--ions--but blocking others. Operating as exquisitely sensitive filters, these "ion channels" play a critical role in biological functions such as muscle contraction and the firing of brain cells.
To rapidly transport the right ions through the cell membrane, the tiny channels rely on a complex interplay between the ions and surrounding molecules,...
The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.
Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...
With innovative experiments, researchers at the Helmholtz-Zentrums Geesthacht and the Technical University Hamburg unravel why tiny metallic structures are extremely strong
Light-weight and simultaneously strong – porous metallic nanomaterials promise interesting applications as, for instance, for future aeroplanes with enhanced...
11.12.2017 | Event News
08.12.2017 | Event News
07.12.2017 | Event News
13.12.2017 | Health and Medicine
13.12.2017 | Physics and Astronomy
13.12.2017 | Life Sciences