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Beliefs about Whether Spending Implies Wealth

Author

Listed:
  • Heather Barry Kappes
  • Joe J Gladstone
  • Hal E Hershfield
  • J. Jeffrey Inman
  • Ashwani Monga

Abstract

Spending is influenced by many factors. One that has received little attention is the meaning that people give to the act of spending. Spending money might imply that someone is relatively wealthy—since they have money to spend—or relatively poor—since spending can deplete assets. We show that people differ in the extent to which they believe that spending implies wealth (SIW beliefs). We develop a scale to measure these beliefs and find that people who more strongly believe that SIW spend their own money relatively lavishly and are, on average, more financially vulnerable. We find correlational evidence for these relationships using objective financial-transaction data, including over 2 million transaction records from the bank accounts of over 2,000 users of a money management app, as well as self-reported financial well-being. We also find experimental evidence by manipulating SIW beliefs and observing causal effects on spending intentions. These results show how underlying beliefs about the link between spending and wealth play a role in consumption decisions, and point to beliefs about the meaning of spending as a fruitful direction for further research.

Suggested Citation

  • Heather Barry Kappes & Joe J Gladstone & Hal E Hershfield & J. Jeffrey Inman & Ashwani Monga, 2021. "Beliefs about Whether Spending Implies Wealth," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 48(1), pages 1-21.
  • Handle: RePEc:oup:jconrs:v:48:y:2021:i:1:p:1-21.
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    File URL: http://hdl.handle.net/10.1093/jcr/ucaa060
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    Cited by:

    1. Bargoni, Augusto & Kliestik, Tomas & Jabeen, Fauzia & Santoro, Gabriele, 2023. "Family firms’ characteristics and consumer behaviour: An enquiry into millennials’ purchase intention in the online channel," Journal of Business Research, Elsevier, vol. 156(C).
    2. Giachino, Chiara & Nirino, Niccolò & Leonidou, Erasmia & Glyptis, Loukas, 2023. "eSport in the digital era: Exploring the moderating role of perceived usefulness on financial behavioural aspects within reward-crowdfunding," Journal of Business Research, Elsevier, vol. 155(PB).
    3. Weiss-Cohen, Leonardo & Newall, Philip Warren Stirling & Ranyard, Rob & Ayton, Peter & Clacher, Iain, 2023. "Revalidating Fernandes et al.’s 2014 financial literacy scale in response to ongoing legislative and behavioral changes," OSF Preprints 493x7, Center for Open Science.
    4. Chen, Siyun & Kou, Sining & Lv, Linxiang, 2024. "Stand out or fit in: Understanding consumer minimalism from a social comparison perspective," Journal of Business Research, Elsevier, vol. 170(C).

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