1. Study suggests customers who pay for their purchases by card are less likely to remember the precise amount paid

    November 19, 2017 by Ashley

    From the Alpen-Adria-Universität Klagenfurt | Graz | Wien press release:

    The transparency of spending money depends on the mode of payment used: cash, single-function cards that offer only a payment function, or multifunctional cards which may also include bonus programmes, user identification or other functions. A recent study has shown that the recall accuracy associated with the act of paying is lower for both card formats than it is for cash transactions.

    According to current estimates, approximately 3 billion new so-called smart cards will be issued across the globe in 2017. Smart cards conveniently combine the payment function with additional types of functionality. Since 2000, the number of smart cards that are carried in users’ wallets has grown by around 20 per cent annually. It is anticipated that these types of functions will be made available directly through smartphones or smart watches in the future.

    Intrigued by this boom, researchers at the University of Cologne and the Alpen-Adria-Universität Klagenfurt have recently examined the effect these shifting payment methods are having on the customers. Rufina Gafeeva, Erik Hoelzl and Holger Roschk have carried out a field study, as part of Rufina Gafeeva’s PhD-thesis, to determine recall accuracy in relation to recently made payments. Data were gathered at two separate time points in cafeterias at a German university; the first time point was during the summer of 2015 (prior to the introduction of a multifunctional card on campus), and the second time point was during the summer of 2016 (following the introduction of the multifunctional card). Researchers were able to analyse guided interviews, which were conducted with a total of 496 students immediately after the act of paying.

    “We were able to show that individuals who pay by card have a less accurate recall of the amount paid than individuals who settle their bill with cash,” the research team summarises the findings. In addition, regarding the multifunctional card, the individual patterns of use play a critical role: “Individuals who use the non-payment functions of the multifunctional card are less likely to remember the transaction details accurately.”

    According to the authors of the study, these results are relevant for the financial wellbeing of everyone. After all: “A precise recollection of past spending has an effect on the willingness to spend money in the future,” the researchers explain. Efforts to encourage the customer to adopt a financially healthy behaviour require increased transparency. “To heighten our awareness we need designs that separate the payment function from other functions, or that visualise the act of spending money, such as immediate payment information or transaction summaries.”


  2. Study suggests long-term states of mind (and impatience) can affect short-term financial decisions

    November 6, 2017 by Ashley

    From the MIT press release:

    Imagine you are receiving a refund payment from the federal government. Are you going to spend it right away or save the money? Is that decision based on your short-term finances? Or does it hinge on whether you identify yourself as a “spender” or a “saver” more generally?

    A new study by an MIT economist sheds more light on the quirks of people’s actions in such cases and suggests that, in addition to immediate financial needs, persistent behavioral characteristics play a key role in even short-term pocketbook decisions.

    The study examines the 2008 economic stimulus payments the U.S. federal government sent to households across the nation. The study’s rather nuanced findings indicate that while people do “smooth” their consumption by spending or saving money based on their own liquidity — as canonical economic theory holds — some longer-term factors are at play as well.

    For starters, other things being equal, lower historical incomes, not just short-term fluctuations in income, match a greater tendency to spend money right away. Beyond that, people who describe themselves as habitual “spenders” will plow through newfound money more quickly. This adds credence to the idea that larger behavioral tendencies, not just rational calculations, help drive financial decisions.

    So while material needs matter, self-assessments about being “savers” or “spenders” do “a phenomenally good job of separating those who save from those who don’t,” says Jonathan Parker, the MIT economist who authored the study. “It’s a question about impatience. Are you someone who is impatient? If you get ‘yes’ for that answer, those are the spenders.”

    The study bears on larger matters of both personal finance and tax policy, since the distribution of tax refunds by income bracket, for example, is tied to their overall economic impact. Like other research, the study shows that people lacking considerable income or wealth are more likely to spend such refunds more quickly.

    “It does suggest that lower-income, lower-liquidity folks tend to tie their consumer demand very much to income,” says Parker, the Robert C. Merton Professor of Finance at the MIT Sloan School of Management.

    The paper, “Why Don’t Households Smooth Consumption? Evidence from a $25 Million Experiment,” appears this month in the latest issue of the American Economic Journal: Macroeconomics.

    Spend now: Three times as much, in fact

    To conduct the study, Parker took advantage of a quirk in the 2008 stimulus. The federal government sent the payments to households on a schedule determined by the last two digits of the recipients’ social security number, something that is unrelated to financial circumstances or personal characteristics. Therefore the timing of the receipt of payments — and the subsequent spending that resulted — was effectively random.

    All told, the study encompasses about 29,000 households actively participating in the Nielsen Consumer Panel, an ongoing survey that measures spending habits and household characteristics across the U.S. The average payment was around $900 per household.

    On one level, the research reinforces the idea that basic financial need drives a certain portion of the household spending. On average, household spending on household goods rose by 10 percent the first week after the payment arrived, and by roughly 5 percent over the first four weeks. But households with low liquidity, which comprised 36 percent of those surveyed, spent more than three times as much of the money in the first week and more than twice as much of the payment in the first four weeks.

    “There are people who have persistently lower incomes and lower liquidity, who spend this money when it arrives,” Parker says. Historical income performance was also bound up in this response. As Parker writes in the paper, “low income in 2006 is as good as” liquidity status at the same time, when it comes to “separating the households who spent from those who did not.”

    Meanwhile, self-conception and long-run spending habits also influenced outcomes considerably, adding a wrinkle to existing models of household behavior in these circumstances. Parker’s research found that those who describe themselves as people who prefer to “spend now” rather than “save for the future” had a threefold increase in spending.

    “I think it suggests to me there is a lot of heterogeneity on the preference side and the behavior side,” Parker says. “Despite the first-order importance of the financial variable in separating people, there’s also a lot of evidence that preferences matter a lot.”

    Or, as he adds, “my findings are consistent with a reasonably simple model in which people with different degrees of impatience try to maintain a stable standard of living but face limits on low-cost borrowing. For the range of differences in behavior that I uncover, so-called behavioral modeling assumptions are second order.”

    Research implications

    The income distribution of any federal income tax cut or refund is an inherently political matter, and the outcome of current efforts in Washington to pass new tax legislation is uncertain. But regardless of policy outcomes, economists can continue to adjust their own models of consumer behavior based on new empirical findings.

    Such models can also better inform the scoring of tax changes, as well as other models of policy, such as those used by the Federal Reserve to characterize how households respond to movements in interest rates.

    In this vein, Parker’s study joins a growing body of literature (including some of his own previous work) that modifies the most streamlined models in which people smooth out consumption in anticipation of drops or increases in income — and instead accounts for the bumps and jolts in spending that the data reveals.

    “We think that people try to maintain a reasonably stable standard of living,” Parker says. And yet, he notes, people “do an awful lot of spending when money shows up.”

    In research terms, Parker says, one contribution of the study is to “cleanly identify and connect differences in spending behavior across people, to measureable differences in people,” such as their self-conceptions as “spenders” or “savers.” He hopes his work will pave the way for improved mathematical models of “consumption and savings and borrowing decisions that incorporate, in a simple yet rigorous way, these differences in behavior.”


  3. Study examines how the financial press influences investors’ opinion and behaviour

    October 31, 2017 by Ashley

    From the University of Luxembourg press release:

    Researchers at the University of Luxembourg have found that the financial press can have detrimental or positive effects on the behaviour of investors and their opinion on the economy as a result of the language used in reporting.

    While a link between financial news and the behaviour of investors has long been assumed, this study (“Modifier words in the financial press and investor expectations”) is the first to deliver empirical data confirming a significant correlation between the press and the development of stocks.

    For the experiment, a group of 80 participants with a background in economics were presented with various news items about particular stocks. In the news items, the names of the companies were anonymized, but they included so-called “modifier words” giving each article a more negative (e.g. “devastating”, “shocking”) or positive (e.g. “healthy”, “encouraging”) angle. The factual information remained the same.

    Participants were then asked to assess the future performance of the stocks with a clear pattern emerging: positive news coverage also led to a positive evaluation and vice versa. Importantly, the style of news reporting had an impact on the hypothetical decision of participants to buy or sell stocks and their overall estimation of the economy.

    Language matters!

    The team of researchers – Prof. Roman Kräussl from the University of Luxembourg’s Luxembourg School of Finance and Prof. Ronald Bosman and Elizaveta Mirgorodskaya (both Vrije Universiteit Amsterdam) – concluded that the evaluation of the economy is less fundamental data-driven than it is emotional impression-driven.

    With the press playing a big role in how the public perceive and understand the economy and financial markets, the experiment provides evidence of the influential role of the media. “In a time when journalism is increasingly under pressure, it is important to highlight the influence media can have on real life scenarios,” commented Prof. Kräussl. “We live in the age of ‘fake news’ and ‘alternative facts’, of fast-paced online and social media. Our research clearly shows the importance of factual and accurate reporting and the power that words yield over investors and, by extension, stock markets and the economy.”


  4. Study looks at how economic factors affect parenting styles

    October 10, 2017 by Ashley

    From the Yale University press release:

    Settling on a parenting style is challenging. Is it better to be strict or more lenient? Have helicopter parents found the right approach to guiding their children’s choices?

    A new study co-authored by Yale economist Fabrizio Zilibotti argues that parenting styles are shaped by economic factors that incentivize one strategy over others.

    Zilibotti and co-author Matthias Doepke, a professor of economics at Northwestern University, assert in a paper published in the journal Econometrica that economic conditions, especially inequality and return to education, have influenced child-rearing strategy.

    “All parents want their children to succeed, and we argue that the economic environment influences their methods of childrearing,” said Zilibotti, the Tuntex Professor of International and Development Economics at Yale. “For instance, greater occupational mobility and lower inequality today makes an authoritarian approach less effective than generations ago. It’s not that parents spare the rod because they are more concerned about their children’s wellbeing now than they were 100 years ago. Rather, parenting strategies adapted to the modern economy.”

    Zilibotti and Doepke assert that parents are driven by a combination of altruism — a desire for their children to succeed — and paternalism that leads them to try to influence their children’s choices, either by molding their children’s preferences or restricting them. These motivations manifest in three parenting styles: A permissive style that affords children the freedom to follow their inclinations and learn from their own experiences; an authoritative style in which parents try to mold their children’s preferences to induce choices consistent with the parents’ notions of achieving success; and an authoritarian style in which parents impose their will on their children and control their choices.

    “There is an element of common interest between parents and children — a drive for success — but there is tension where parents care more about their children’s wellbeing as adults,” Zilibotti said. “We postulate that socioeconomic conditions drive how much control or monitoring parents exercise on their children’s choices.”

    The researchers apply their model across time periods and between countries. Parenting became more permissive in the 1960s and 1970s when economic inequality reached historic lows in industrialized countries and parents could realize a return on letting children learn from their own experiences, they argue. Across countries, they document a link between parenting, on the one hand, and income inequality and return to education, on the other hand. Using the World Value Survey, where people are asked which attitudes or values they find most important in child rearing, they identify permissive parents with those emphasizing the values of imagination and independence in rearing children, whereas authoritarian and authoritative parents are those who insist on the importance of hard work and obedience, respectively. They show that parents in more unequal countries are less permissive. The same pattern emerges when they consider redistributive policies. In countries with more redistributive taxation, more social expenditure, and even stronger civil right protection, parents are significantly more permissive.

    The researchers assert that their theory can help explain the recent rise of “helicopter parenting,” a version of the authoritative style in which parents seek to influence their children’s choices with a combination of persuasion and intensive monitoring. They argue that the style gained purchase in the United States as economic inequality increased, inducing a shift to more intensive parenting to strengthen children’s drive for achievement and prevent them from risky behaviors. Meanwhile, they argue, more permissive parenting remains popular in Scandinavian countries, where inequality is lower than it is in the United States.


  5. Study suggests gender differences in financial risk tolerance linked to different response to income uncertainty

    September 30, 2017 by Ashley

    From the University of Missouri-Columbia press release:

    Prior research has long shown that women are, on average, less risk tolerant in their financial decisions than men. This is a concern as investors with low levels of risk tolerance might have greater difficulty reaching their financial goals and building adequate retirement wealth because they are unlikely to invest in stocks. Now, a researcher from the University of Missouri has found that men and women do not think about investment risks differently. Instead, income uncertainty affects men and women differently, which leads to differences in risk tolerance.

    “Risk tolerance is one of the most important factors that contributes to wealth accumulation and retirement,” said Rui Yao, an associate professor of personal financial planning in the MU College of Health and Environmental Sciences. “It is important to understand what causes women to be less risk tolerant so that financial planners can better serve their needs as women, on average, live longer than men and often need more retirement savings.”

    For her study, Yao examined data from the Survey of Consumer Finances. The survey is conducted every three years and supported by the Federal Reserve and U.S. Department of the Treasury. By analyzing data from nearly 2,250 unmarried American individuals, Yao found that women are more likely to have uncertain incomes from year to year. Life events such as child birth, child care and care-giving often contribute to women’s income uncertainty.

    Yao also found that, on average, women had lower net worth than men. This may have resulted, in part, from women keeping funds in accounts with low returns to buffer the risk of negative income shocks.

    One-quarter of women and one-fifth of men in the sample reported using a financial planner for saving and investment decisions, but the advice given to women may not be in their best interest. Yao suggests that financial planners need to understand the differences in income uncertainty and net worth between men and women and the way in which these differences relate to risk tolerance.

    “Simply telling women to be more risk tolerant is ineffective,” Yao said. “In fact, it might encourage women to take more financial risks than they can tolerate, which could lead to more problems in the future. The difference in investment advice received by men and women requires further investigation, particularly given the new fiduciary standards for financial advisors.”

    Yao’s advice to women is to plan for income uncertainty by creating a financial strategy that fits their needs. For example, when anticipating child-rearing or care-giving periods in the near future, women can and should be more conservative in their investing. When those periods are coming to an end, women should work with their financial planners to make riskier investments.


  6. Study links mental health to retirement savings

    September 13, 2017 by Ashley

    From the Medica Research Institute press release:

    The question of how mental health status affects decisions regarding retirement savings is becoming a pressing issue in the United States. Key factors contributing to this issue include the tenuous state of the Social Security system, greater use of defined-contribution pension plans by employers, longer lifespans, and the rise of depression and other mental health issues in older Americans.

    In the latest edition of the journal Health Economics, researchers Vicki Bogan of Cornell University and Angela Fertig, research investigator at Medica Research Institute, find that mental health problems have a large and significant negative effect on retirement savings.

    “A growing number of households are dealing with mental health issues like depression and anxiety,” says Fertig. “Our project studies the effect that mental health issues have on retirement savings because we need to understand how health problems may affect the economic security of this growing population.”

    The researchers found that psychological distress is associated with:

    • up to a 62 percent lower probability of holding retirement accounts
    • $15,000 less held in retirement savings accounts by single households and $42,000 less held by married couples
    • up to a 47 percent higher probability that married couples withdraw from their retirement accounts

    The results are generally consistent across single and married households. However, the study found some evidence to indicate that singles with psychological distress may divert funds away from retirement accounts, while married individuals with psychological distress may withdraw more from their retirement accounts. The study did not find evidence indicating that psychological distress affects retirement savings behavior through financial literacy or cognitive limitations.

    The effect sizes found are large, suggesting that more employer management and government regulation of defined-contribution pension plans, IRAs, and Keogh retirement accounts may be warranted.

    “The magnitude of these effects underscores the importance of employer management policy and government regulation of these accounts to help ensure households have adequate retirement savings,” says Fertig. “Better understanding the link between mental health and retirement savings decisions could inform policy interventions that may encourage households to save sufficient funds for retirement through defined contribution plans and shape national changes to the defined contribution plan withdrawal penalties.”


  7. Study suggests personality may drive purchasing of luxury goods

    September 6, 2017 by Ashley

    From the University College London press release:

    People who are extraverted and on low incomes buy more luxury goods than their introverted peers to compensate for the experience of low financial status, finds new UCL research.

    The study, published today in Psychological Science, used real life spending data from UK bank accounts to investigate the spending habits of richer and poorer people with different personality types.

    People living on a low income often feel low status in society and spend a higher percentage of their money on goods and services that are perceived to have a high status.

    “We’ve shown that personality looks to be an important factor in how people respond to living with limited resources. We hope this new association will help us better understand which people may be likely to engage in behaviour that perpetuates the conditions of financial hardship,” explained Joe Gladstone, study co-author from UCL School of Management.

    Previous research has found that people who are sociable and outgoing care more about their social status than others. The new research shows that when extraverted people have a lower income, they spend proportionately more on status goods than introverts on the same income. At higher incomes, the difference in spending lessens as introverted people buy more luxury goods.

    “It’s clear from our study that an extraverted personality is a driver for low-income individuals purchasing more luxury goods, and this is most likely to compensate for a perceived low social status that isn’t as keenly felt by introverts. We saw very little difference in the spending habits of introverts and extraverts with high incomes,” said Blaine Landis, study co-author from UCL School of Management.

    The study was conducted in collaboration with a UK-based multinational bank. Customers were asked whether they would complete a standard personality questionnaire, and to consent to their responses being matched anonymously for research purposes with their bank transaction data.

    The study analysed thousands of transactions from 718 customers over 12 months. The results took into account other factors that could influence spending habits, such as age, sex, employment status and whether the customers had children. Cash spending was also taken into account.

    Each person’s spending data were sorted into a number of spending categories from one (very low status) to five (very high status). High-status categories (i.e., those with average scores of four or five) included foreign air travel, golf, electronics and art institutions, whereas low-status categories (i.e., those with average scores of two or one) included pawnbrokers, salvage yards and discount stores.

    The team found the interaction between income and extraversion in predicting spending on luxury goods is significant and emphasize that while this useful in understanding the relationship, further research is needed to see whether the relationship is causal and whether the results are representative of the UK population as a whole.


  8. Smokers 20 percent more likely to quit when cigarettes cost $1 more

    September 3, 2017 by Ashley

    From the Drexel University press release:

    Older smokers are usually more set in their ways, but a dollar increase in cigarette prices makes them 20 percent more likely to quit, a new Drexel University study found.

    The study, published in Epidemiology, used 10 years of neighborhood-level price data to determine how it affected nearby smokers, focusing on those who skewed older.

    Older adult smokers have been smoking for a long time and tend to have lower rates of smoking cessation compared to younger populations, suggesting deeply entrenched behavior that is difficult to change,” said Stephanie Mayne, PhD, the lead author of the study who is a former doctoral student at Drexel and now a fellow at Northwestern. “Our finding that increases in cigarette prices were associated with quitting smoking in the older population suggests that cigarette taxes may be a particularly effective lever for behavior change.”

    Taking a look at the local relationship between smoking habits and cigarette prices is an understudied but important area to look at, according to the senior author on the study, Amy Auchincloss, PhD, associate professor in the Dornsife School of Public Health.

    “Results on this topic primarily have come from population surveillance,” she said. “But we had neighborhood tobacco price data and could link that to a cohort of individuals who were followed for about 10 years.”

    Smoking cessation remains an important focus of public health efforts since it remains the largest preventable cause of death and disease in not just the United States, but the world.

    The cohort Mayne and Auchincloss looked at included smokers ranging in age from 44 to 84 and stretched across six different places, including the Bronx, Chicago, and the county containing Winston-Salem, North Carolina. Data were taken from the study population between 2002 and 2012 as a part of the Multi-Ethnic Study of Artherosclerosis (MESA).

    In addition to finding that current smokers were 20 percent more likely to quit smoking when pack prices went up by a dollar, Mayne and Auchincloss’ team showed that there was a 3 percent overall reduction in smoking risk.

    However, when the data was narrowed to heavy smokers (defined as smoking more than half a pack a day), there was a 7 percent reduction in risk. When prices increased by a dollar, heavy smokers also showed a 35 percent reduction in the average number of cigarettes they smoked per day, compared to 19 percent less in the overall smoking population.

    “Since heavy smokers smoke more cigarettes per day initially, they may feel the impact of a price increase to a greater degree and be more likely to cut back on the number of cigarettes they smoke on a daily basis,” Mayne said.

    While the data focused on a population older than 44, Mayne believes the price effect may be “similar or possibly stronger in a younger population.”

    “Some research suggests younger adults may be more price-sensitive than older adults,” she pointed out.

    Something she found, though, was that smoking bans in bars and restaurants did not appear to have any effect on smoking behavior in the study population. Although more research is likely necessary to see why that is and whether it’s true — Mayne will soon publish a study devoted to that — one possible explanation is that the economic pressures of a cigarette price increase provide a stronger incentive to quit than placing limits on smoking in public places.

    Mark Stehr, PhD, an associate professor in Drexel’s School of Economics who also served as a co-author on the study, also had a thought on the bans’ effect.

    “A ban may be circumvented by going outside or staying home, whereas avoiding a price increase might take more effort,” he pointed out.

    Based on results from this study, raising cigarette prices appears to be a better strategy for encouraging smoking cessation across all ages.

    “More consistent tax policy across the United States might help encourage more older adults to quit smoking,” Mayne said.

    “Given our findings, if an additional one dollar was added to the U.S. tobacco tax, it could amount to upwards of one million fewer smokers,” Auchincloss said. “Short of federal taxes, raising state and local taxes and creating minimum price thresholds for tobacco should be essential components of a comprehensive tobacco control strategy — particularly in places with high tobacco prevalence.


  9. ‘Tightwads and spenders’ study examines financial perceptions that hurt couples

    August 30, 2017 by Ashley

    From the Brigham Young University press release:

    When a husband thinks his wife spends too much money, whether it’s reality or perception, financial and marriage problems follow.

    A new multistate study from researchers at BYU and Kansas State University looked at contrasting financial personalities in a marriage. They titled the personalities “tightwads and spenders,” as seen in the Journal of Financial Planning.

    What shaped these personalities in marriage wasn’t concrete attributes the individuals displayed or even the circumstances they were in. Rather, it was the perception about how spendy the other spouse was.

    “The fact that spouses’ perceptions of each other’s spending behaviors were so predictive of financial conflict suggests that when it comes to the impact of finances on relationships, perceptions may be just as important, if not more important, than reality,” said Ashley LeBaron, BYU graduate student and study co-author.

    The study found that for husbands, having a wife who they saw as a spender was the highest contributor to financial conflict. For wives, having a husband who viewed them as a spender was the highest contributor to financial conflict. This was seen for couples with high incomes and low incomes as well as with couples who spent a lot and those who did not spend much at all. The views were completely relative to perception.

    LeBaron worked with BYU family life professor Jeffrey Hill as well as a national expert in the area of finances in marriage, Kansas State professor Sonya Britt-Lutter.

    “Couples need to communicate about finances, especially early in marriage,” Britt-Lutter said. “Don’t think that financial problems will magically go away when circumstances change. The study showed that circumstances weren’t the issue here, perception was, and perception doesn’t always change when circumstances do.”

    Secondarily to the perception of a spendy wife, the study found that men saw having more children as impacting financial conflict, and women saw a lack of financial communication overall as impacting financial conflict.

    Of those who participated in the study, 90 percent of women and 85 percent of men reported that they experienced some kind of financial worries.

    The researchers suggest that no matter what the perceptions or realities are exactly, if finances are causing problems in a marriage, help is possible.

    “The good news is that couples can benefit from clinical help,” Hill said, “whether that be a financial planner or a marriage and family therapist.”

    There are also a host of resources available online, paid and free, to assist in budgeting and money management.

    Data for this study came from BYU’s Flourishing Families Project, which is a longitudinal, multi-informant, multi-method look at inner-family dynamics. The project began in 2007 and to date includes 10 waves of data (including questionnaire, video and physiological data) on nearly 700 families from two locations. Hundreds of BYU undergraduate and graduate students have been involved over the course of the project.


  10. Systematic research investigates effects of money on thinking, behavior

    July 21, 2017 by Ashley

    From the Association for Psychological Science press release:

    Numerous studies have shown that being prompted to think about money can predispose people to engage in self-sufficient thinking and behavior — but some findings suggest that demographic characteristics may moderate this type of effect. In a new research article, scientists present results from three experiments that systematically explore these money-priming effects, finding inconsistent evidence for the effect of money primes on various measures of self-sufficient thinking and behavior.

    The research is published in Psychological Science, a journal of the Association for Psychological Science.

    Psychology researcher Eugene M. Caruso (University of Chicago Booth School of Business) and co-authors Oren Shapira (Stony Brook University) and Justin Landy (also Chicago Booth) were motivated to carry out this systematic exploration after conducting a set of studies in which they observed varied findings that were inconsistent with their predictions.

    In their initial studies, Caruso and his collaborators found that the effects of money reminders on participants’ thinking often seemed to depend on certain demographic characteristics, a result they were not expecting. In discussing these results, they discovered that colleagues had also observed unpredicted interaction effects in their research in this area.

    Importantly, the kinds of interaction effects observed seemed to vary across different studies that used different techniques for activating the concept of money.

    “These inconsistent results led us to step back to try to gain a better understanding of whether different money primes lead to similar effects, and whether they interact with sociodemographic characteristics in a reliable, and potentially theoretically meaningful, manner,” Caruso explains.

    To do this, Caruso, Shapira, and Landy decided to systematically evaluate the effects of various money-priming manipulations on a predetermined set of outcomes while accounting for the potential influence of certain sociodemographic factors, within a single experiment that sampled a diverse group of participants.

    In their first experiment, the researchers recruited a total of 2,167 participants for an online study, randomly assigning participants to receive specific primes. For example, some saw a faint image of $100 bills in the background of the instructions screen, others were asked to select the best sizes and shapes for new paper currency, some completed phrases that included money-related terms, while others were asked to imagine having ample access to money. Some participants saw a clear image of $100 bills and were explicitly asked to describe what money meant to them, while others were asked to recall a time when they felt powerful.

    The results showed that four of the five money primes did activate the concept of money. Participants exposed to these primes were more likely to complete word stems to create money-related words compared with participants who received a neutral prime or no prime — only those exposed to the background image of money showed no difference in the word completion task relative to their peers.

    But the primes seemed to have weak and inconsistent effects on participants’ feelings of wealth and self-sufficiency. Only participants who imagined an abundant life reported differences in self-sufficiency, and they actually reported lower self-sufficiency compared with those who received a neutral prime, an unexpected finding.

    Additionally, there was little evidence to suggest that the effects of the primes on various outcomes were moderated by any of the demographic characteristics measured, including gender, socioeconomic status, and political ideology.

    The researchers observed similar results in a second online experiment with 2,150 participants that omitted the money-activation measure.

    In a third experiment, Caruso, Shapira, and Landy conducted a lab-based study with 332 members of the university community. To examine the effects of money primes on self-sufficient behavior, the researchers measured how long participants spent working on a puzzle that was actually unsolvable before they asked for help.

    The results echoed those of the previous online studies: The three money primes tested had weak and inconsistent effects across the different outcome measures. Only those participants who unscrambled phrases including money-related terms reported greater feelings of self-sufficiency relative to the comparison group.

    “Contrary to what we expected based on the published literature, we did not find that any manipulation consistently affected any dependent measure across our three studies, nor did we find reliable evidence for statistical moderation by sociodemographic characteristics,” says Caruso.

    The researchers urged caution in interpreting the findings relative to specific published studies, given that the three experiments were not designed to be exact replications of any one study. Rather, this series of experiments can be seen as offering a rigorous and systematic examination of a particular effect.

    “Beyond the implications for money-priming research, we hope that our methodological approach — comparing multiple manipulations of a construct and assessing multiple individual-difference moderators within the same heterogeneous sample — can make a broader contribution by supplementing the emerging toolkit of methodologies for establishing the reliability of individual effects and the validity of the theories that attempt to explain them,” Caruso concludes.