Consumers will spend more to get rid of worn bills because they evoke feelings of disgust but are more likely to hold on to crisp new currency, according to a new study in the Journal of Consumer Research.
"The physical appearance of money can alter spending behavior. Consumers tend to infer that worn bills are used and contaminated, whereas crisp bills give them a sense of pride in owning bills that can be spent around others," write authors Fabrizio Di Muro (University of Winnipeg) and Theodore J. Noseworthy (University of Guelph).
Does the physical appearance of money matter more than we think? Money is said to be interchangeable. If we lend someone a $20 bill, it shouldn't matter if they pay us back with the same $20 bill or a different one. This is why diamonds, real estate, and art are not suitable as currency. But money may not be as interchangeable as consumers think.
In several studies, consumers were given either crisp or worn bills, and asked to complete a series of tasks related to shopping. Consumers tended to spend more with worn bills than with crisp bills. They were also more likely to break a worn larger bill than pay the exact amount in crisp lower denominations.
However, when consumers thought they were being socially monitored, they tended to spend crisp bills more than worn bills. When testing the well-known finding that people spend more when given the equivalent amount in lower denominations (four $5 bills) than when holding a large single denomination (a $20 bill), the authors found that the physical appearance of money can enhance, attenuate, or even reverse this effect.
"Money may be as much a vehicle for social utility as it is for economic utility. We tend to regard currency as a means to consumption and not as a product itself, but money is actually subject to the same inferences and biases as the products it can buy," the authors conclude.
University of Chicago Press Journals: http://www.journals.uchicago.edu
This press release was posted to serve as a topic for discussion. Please comment below. We try our best to only post press releases that are associated with peer reviewed scientific literature. Critical discussions of the research are appreciated. If you need help finding a link to the original article, please contact us on twitter or via e-mail.
The World Health Organization says an outbreak of the deadly Ebola virus in West Africa has been linked to the deaths of more than 120 people. As of Monday, the organization recorded a total of 200 suspected or confirmed cases of Ebola, which is normally found in central or eastern Africa, in…
To see if low blood sugar sours even good relationships, scientists used an unusual tool: voodoo dolls representing spouses. As hunger levels rose, so did the number of pins.
A Beijing artist who collected a jar of air from Provence, France, sold it at auction "to question China's foul air and express dissatisfaction."
With purported activity against cardiac disease, cancer and even ageing, the pressure on resveratrol to deliver is enormous
Health workers responding to an Ebola outbreak in Guinea had no maps to go on, so they turned to the internet for help
Researchers ignited a debate three years ago when they changed a deadly flu virus so that it could spread between people. Only five mutations are needed to turn the virus into a pandemic threat.
Hundreds of millions of pounds have been wasted on Tamiflu, a drug for flu that may work no better than paracetamol, a landmark analysis says.
Giving heroin users vouchers in exchange for taking vaccines is the stuff of tabloid headlines. But it works, says addiction researcher Nicola Metrebian
An initiative to share the control group data from 34 clinical trials of cancer drugs could lead to more efficient trials and better outcomes for patients
If you know Ciroc and Patron, you may well be listening to a lot of songs that name-check brand-name alcohol. And if you're a teenager, you may be binge drinking a lot more, researchers say.