Right now, I am enjoying taking a behavioral economics class through Coursera and Duke University. It is truly fascinating, and I am looking at my decisions in a whole new way. The underlying theme of the course is that we believe that we are rational decision makers, but in reality most of our decisions are biased and completely irrational. (By the way, the title of the course is The Beginners Guide to Irrational Behavior.)
Last week, one of our required readings questioned if there is a link between Americans widening waistlines and our increasing use of credit and debit cards. The questions that they asked before starting their research were these:
Previous researchers have concluded that paying with a credit card decreases the pain of payment and lessens the guilt of a purchase, whereas, paying with cash has an increased pain of payment.
Using this previous conclusion, the researchers conducted four different studies to analyze the purchasing habits of a variety of people. One of the studies was an analysis of shopping habits at a local grocery retailer, while the other three studies were conducted online where people either went shopping virtually, or rated normal shopping habits.
So what did they discover?
Last week, one of our required readings questioned if there is a link between Americans widening waistlines and our increasing use of credit and debit cards. The questions that they asked before starting their research were these:
- Does the mode of payment influence consumers’ ability to control their impulsive urges?
- Are consumers more likely to buy unhealthy food products when they pay by credit or debit cards than when they pay in cash?
Previous researchers have concluded that paying with a credit card decreases the pain of payment and lessens the guilt of a purchase, whereas, paying with cash has an increased pain of payment.
Using this previous conclusion, the researchers conducted four different studies to analyze the purchasing habits of a variety of people. One of the studies was an analysis of shopping habits at a local grocery retailer, while the other three studies were conducted online where people either went shopping virtually, or rated normal shopping habits.
So what did they discover?
The results from all these studies offer convergent support for our hypothesis that card payments increase the purchase and, presumably, the consumption of unhealthy food products. Our conceptualization is based on the premise that when consumers encounter vice products—such as cookies, cakes, and pies—the emotive imagery and associated desire trigger impulsive purchase decisions. These visceral factors entice them to include such vice products in their shopping baskets, even though they consider such products to be unhealthy. (Thomas et al, 137)
Essentially, we spend too much time thinking of what will satiate or please us in the here and now, and we do not spend enough time thinking of the long-term consequences of our purchases or actions. I concur.
When my husband and I go shopping on the weekends, we do not bring a list with us and just buy what we usually buy and throw in whatever else we feel like. Since our fruit and veggies get delivered to our house, we are usually buying cereal, milk, eggs, yogurt, grains, etc. I know that there are often times that I see something that looks good and put it on the basket, even though I had no intention of buying it when I walked in. Later, when I get home and put it away I think, “Why did I buy this? Did I even look at the ingredients? Do I really want to put this in my body?” But, alas, I have it now and don’t want to waste it, so I go ahead and eat it.
If you are like me, and would like to curb your purchase of “vices” (as they call it in this research) then bring cash to the store next time instead of a card. You could probably also broaden it to when you go to out with friends. If you extend the research outside of the grocery store, then you might indulge less at the bar, and probably be safer getting home.
If you want to read the entire study, here is the information.
Happy Shopping!
When my husband and I go shopping on the weekends, we do not bring a list with us and just buy what we usually buy and throw in whatever else we feel like. Since our fruit and veggies get delivered to our house, we are usually buying cereal, milk, eggs, yogurt, grains, etc. I know that there are often times that I see something that looks good and put it on the basket, even though I had no intention of buying it when I walked in. Later, when I get home and put it away I think, “Why did I buy this? Did I even look at the ingredients? Do I really want to put this in my body?” But, alas, I have it now and don’t want to waste it, so I go ahead and eat it.
If you are like me, and would like to curb your purchase of “vices” (as they call it in this research) then bring cash to the store next time instead of a card. You could probably also broaden it to when you go to out with friends. If you extend the research outside of the grocery store, then you might indulge less at the bar, and probably be safer getting home.
If you want to read the entire study, here is the information.
- Thomas, M., Desai, K. K., & Seenivasan, S. (2011). How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices. Journal of Consumer Research, 38(1), 126-139.
Happy Shopping!
