Category: Money

Money, Social

When People Are Better Able To Rely On Their Own Resources, Group Cooperation Breaks Down

By Matthew Warren

Imagine that you live in a village which is threatened with rising sea levels. If you don’t do anything, your home is going to be flooded. You could pool your resources together with other villagers and build a large dam around the entire village to ensure that everyone’s property is safe. Or, if you have enough resources yourself, you could build a smaller dam around your own house, protecting your property — and leaving everyone else to either do the same or try and co-operate without you.

Human societies constantly face similar choices between public and private solutions to pressing issues: think about the provision of healthcare or education, for instance. But only some people can afford to build a dam around their own house, or send their child to a private school. Now a new study in Nature Communications suggests that when group members are able to be self-reliant in this way, the provision of public goods suffers.

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Money

Visible Reminders Of Inequality Can Raise Support For Taxing The Wealthy

By Emily Reynolds

Most of us are aware of the vast inequality that exists in the world — and even if we’re not, exposure to that information can change how we behave. Research has found that we’re more likely to take risks when exposed to inequality and that it can make high-income individuals less likely to be generous.

It can also change the way people feel about public policy, as Melissa L. Sands and Daniel de Kadt from the University of California, Merced find in a new study in Nature. They explored real-world inequality in low-income neighbourhoods in South Africa — and found that visible reminders of unequal socioeconomic status can  raise support for taxation of the wealthy.

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Mental health, Money, Positive psychology

Having Realistic Expectations Could Make You Happier Than Being Over-Optimistic

By Emily Reynolds

There are fairly good arguments for optimism and pessimism both. Optimists, who see the best in everything, are likely to have a sunnier disposition; pessimists, on the other hand, would argue that their negative expectations never leave them disappointed when the worst actually happens.

But in the end, it might be realists who win out. According to a study published in Personality and Social Psychology Bulletin, being realistic about your life outcomes is likely to make you happier than overestimating them.

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Money, Social

Why Are We So Quick To Scrutinise How Low-Income Families Spend Their Money?

By Matthew Warren

As shops re-opened in the UK this week, social media users were quick to pour scorn on the hundreds of eager shoppers who queued up to get in. Yes, it’s unclear whether it was a good decision to re-open businesses — but there was a certain snobbishness to many of these posts. Most of the ire was directed at those lining up outside Primark, which sells clothes at prices more affordable to those on low incomes than most other high street stores. Meanwhile, queues also formed outside high-end shops like Selfridges and Harrods — but these shoppers somehow escaped the wrath of most social media commentators.

This situation seems to reflect a broader inequality in how we judge other people’s purchase decisions: we’re much more willing to scrutinise — or even dictate — how people on lower incomes spend their money compared to those on higher incomes. There are countless examples of this — think of the low-income mother who is criticised for treating her children to a rare meal out, or the refugee who is shamed for owning a smartphone.

Now a new study in PNAS provides some clues as to the origins of this bias. Across a series of 11 studies involving more than 4,000 participants, Serena Hagerty and Kate Barasz from Harvard Business School find that we tend to believe lower-income people need less than those on higher incomes, and that this in turn restricts our perceptions about what is acceptable for this group to buy.

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Money, Social, The self

Aspiring To Be Rich May Damage Your Relationships

By Emily Reynolds

Daydreaming about an ideal life, it can be easy to slip into fantasies about wealth — there’s a reason, after all, that “winning the lottery” is the ultimate dream for so many people. The reality of being rich, however, often doesn’t match that dream, with some research suggesting that people who prioritise time are much happier than those who prioritise money.

A new study in the Personality and Social Psychology Bulletin drives home the message that money really isn’t everything. The team finds that “financially contingent self-worth” — self-esteem based on financial success — can leave people feeling lonely and disconnected.

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Feature, Mental health, Money

The Psychological Impacts Of Poverty, Digested

street of long abandoned and derelict collapsing houses and commercial buildings

By Emma Young

For a “rich” country, by global standards, the UK has an awful lot of people who are not. Fourteen million people — one fifth of the population — live in poverty. Of these, four million are more than 50% below the poverty line, and 1.5 million are classed as destitute, unable to afford even basic life essentials.

For children who grow up in poverty, there are impacts that go way beyond the fact of material shortages. “Children experience poverty as an environment that is damaging to their mental, physical, emotional and spiritual development,” notes UNICEF. Clearly, there’s a critical role for psychological research in this area, first in revealing just what poverty does to children and adults — but also in developing strategies to ameliorate those impacts.

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environmental, Money, Social

Giving People Simple “Moral Nudges” Encourages Them To Donate Much More To Charity

Woman collecting money for charity and holds jar with coins.

By Emma Young

How do you persuade people to do the “right thing” when there’s a personal price to pay? What convinces someone to spend time and effort on a task like recycling batteries, for example — or literally spend cash by giving to people in desperate need?

It’s an important question. “Finding mechanisms to promote pro-social behaviour is fundamental for the wellbeing of our societies and is more urgent than ever in a time of key global challenges such as resource conservation, climate change and social inequalities,” write the authors of a new paper, published in Scientific Reports. Across a series of five online studies involving a total of more than 3,000 participants, Valerio Capraro at Middlesex University of London and colleagues provide evidence for a cheap, effective method: simply “nudging” people to reflect on what is the morally right thing to do. This simple intervention had some impressive effects, even increasing actual charitable donations by close to half.

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Autism, Faces, Money

In the “Trust Game”, men with more autistic traits were less influenced by their partner’s facial appearance 

By Emma Young

We make all kinds of snap decisions about a person based on their facial appearance. How trustworthy we think they are is one of the most important, as it can have many social and financial consequences, from influencing our decisions about whether to lend someone money to which Airbnb property to book.

However, as the authors of a new study, published in the British Journal of Psychology, note, “Although facial impressions of trustworthiness are formed automatically, they are not especially accurate predictors of trustworthy behaviour.” People who are less susceptible to forming these impressions could, then, be at an advantage. And, as Jasmine Hooper at the University of Western of Australia and colleagues now report, men with high levels of autistic traits fall into this category. 

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Emotion, guest blogger, Money

The “experiential advantage” is not universal – the less well-off get equal or more happiness from buying things

By guest blogger Juliet Hodges

Being rich(er) may not guarantee happiness, as shown by ample evidence from the social sciences, but there are ways of spending money that will make you happier than others. Recent research has uncovered the “experiential advantage”: greater happiness from spending money on experiences (holidays, meals, theatre tickets) instead of material things (gadgets, clothes, jewellery). This could be for a number of reasons, such as experiences being more closely aligned with our values and being less likely to produce rumination and regret. There are exceptions to this rule, of course. Studies have found that personality traits can influence whether experiences or things make a person happiest; for example, introverts are made much happier by spending vouchers in a bookshop than a bar.

Another likely exception, that hasn’t previously been studied, is how social class, and specifically access to resources, affects this experiential advantage. Indeed, most research in this area has been performed with college students, who are typically more affluent than the general population, and there are reasons to believe that those who are less well-off might prefer material goods. For them, buying things as opposed to experiences could be more practical: they last longer, can be used multiple times and potentially resold in the future. To put this reasoning to the test, a recent paper in Psychological Science investigated whether the experiential advantage is diminished or absent for people who can afford very little compared with those who can afford a lot.

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Money, Social

Does receiving favours and freebies make you uncomfortable? Maybe you have “reciprocity anxiety”

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By Christian Jarrett

Years ago, my wife and I were window shopping in the Brighton lanes when we decided to enter a posh perfume store to take a closer sniff. A smiling sales woman approached and, to our delight, offered us each a complimentary glass of sparking wine and some nibbles. Soon though, our glee turned to discomfort: could we really just walk out having enjoyed the freebies? Conspiring like thieves, we decided that although we wouldn’t buy anything (not that we could have afforded to), we had better stay and look interested a while longer; we even dropped a false hint to the woman at our likely return.

According to a team of researchers led by Xiling Xiong at Zhejiang University in China, my wife and I were suffering from an acute bout of reciprocation anxiety. In their new paper in the Journal of Economic Psychology, Xiong and his colleagues propose that this is not just a state, but a trait – a specific kind of social anxiety – that some of us are more prone to than others, and what’s more, they’ve created a new questionnaire to measure it.

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