Category: Money

Can’t Buy Happiness? Research On Money, Digested

By Emma Young

Poverty can have long-lasting psychological effects. But for people who live above the poverty line, expectations about how much money we should have or need, as well as decisions about what to spend our money on and what to save for the future, can all affect psychological wellbeing, too. However, some well-worn ideas about this are being challenged, as we explore here.

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Regular Gamblers Turned To Online Gambling During The Pandemic

By Emily Reynolds

Gambling is big business in the UK. According to NHS Digital, 57% of men and 54% of women reported gambling in 2018, while the Gambling Commission suggests that online gambling grew by 8.1% from 2019 to 2020.

During the pandemic, gambling changed quite significantly: while consumers could still buy scratchcards and lottery tickets in supermarkets and off licenses, betting shops were closed and sports matches cancelled, leading many activities to move entirely online. And according to a new study from researchers at the University of Bristol, although the British public gambled less overall during lockdown, among regular gamblers, rates of online gambling increased substantially. 

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People Prefer More Attractive Financial Partners — Even Ones Who Lose Them Money

By Emma Young

Physically attractive people are routinely judged to be “superior” in other ways — to be more trustworthy, for example, and honest, and intelligent. However, evidence for the unwarranted “attractiveness halo” effect has tended to come from studies that have involved snap-judgements with no feedback or repercussions for the people doing the judging. Gayathri Pandey and Vivian Zayas at Cornell University, US, wanted to explore how this bias plays out in the longer term, when contradicted by actual data. If, say, we’re given information that an attractive investor is actually losing us money, while an unattractive investor is securing profits, surely we’ll quickly drop that bias in relation to these individual people at least? Alarmingly, the pair’s new paper in the British Journal of Psychology suggests not.

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Financial Stress In Early Adulthood Is Related To Physical Pain Decades Later

By Emily Reynolds

Pain is not a purely biological phenomenon: discrimination, anxiety around work, and general mental strain have all been shown to contribute to the experience of chronic pain. Many researchers therefore take a biopsychosocial approach, exploring the multifarious factors that impact on and are impacted by pain.

A new study in Stress & Health explores the long term consequences of social factors on pain. The team, from the universities of Georgia and South California, Los Angeles, specifically focus on families involved in the 1980s “farm crisis” in the US Midwest, a period where many lost their jobs, land value crashed, and businesses failed — and finds that this financial stress is related to the experience of pain nearly 30 years later.

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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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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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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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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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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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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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