What’s your ceiling? Is there an amount of money – savings – that you cannot breach? You get just above that amount, and something comes up, something happens that brings you down to your “normal average”. Is there an amount like that, or is your cash cache steadily growing? I have my “magic number”. I’ve had discussions about this with two people who have their own “magic number” above which they can’t jump… yet.
… at least while we’re shopping.
In the study, published in the Journal of Consumer Psychology, researchers from the University of Michigan carried out three experiments to investigate whether shopping restored a sense of control in people to counter feelings of sadness. Shopping was up to 40 times more effective at giving people a sense of control, and they were three times less sad compared to those who only browsed.
The study was carried out at the same university that issues the monthly Consumer Sentiment Index 🙂
For years we’ve been fed the “shopping is an addiction” line. What a change of errr… sentiment.
Source: Say buy buy to the blues: Picking goods and paying for them really does banish sadness, says a study into retail therapy
Yep, this tracks. I’m coming from the other end of this spectrum, what with my risky investing behavior.
If you believe that major market moves happen in New York, then watch the weather there. I’ve paid attention to that on occasion, mainly in dark winter storms but it’s only useful for daytrading.
Wouldn’t this mean that in sunnier climates, say in California, people invest more conservatively?
Weather variables, and sunshine in particular, are found to be strongly correlated with financial variables. I consider self-reported happiness as a channel through which sunshine affects financial variables. I examine the influence of happiness on risk-taking behavior by instrumenting individual happiness with regional sunshine, and I find that happy people appear to be more risk-averse in financial decisions, and accordingly choose safer investments.
Happy people take more time for making decisions and have more self-control. Happy people also expect to live longer and accordingly seem more concerned about the future than the present, and expect less in inflation.
Source: “Weather and Financial Risk-Taking: Is Happiness the Channel?” from the German Socio-Economic Panel Study on Economic Research, August, 2009
I’m getting lots of site visitors looking for the Depression-era charts. It’s been a popular topic ever since the crash, BUT now more than ever. That’s a contrary indicator, in my opinion.
As for the retail investor sentiment, it shifted far towards the bearish side, very fast.
That’s another contrary indicator.
I don’t want to be short here.
WOW! I found this both funny (I actually laughed out loud) and fascinating.
In short – handling money (compared with handling paper) reduces stress from loneliness, as well as physical pain from hot water. Somehow it makes a lot of sense, but also seems crazy.
The threshold must be different for everyone, but as the saying goes “everyone has a price”.
In ‘The symbolic power of money: reminders of money alter social distress and physical pain’ published in the journal Psychological Science, Xinyue Zhou, Kathleen Vohs and Roy Baumeister explored how money could reduce a person’s feeling of pain and also negate their need for social popularity.
Harriet de Wit, Faculty Member for f1000 Medicine, said: “This research extends our understanding of relationships between social pain and physical pain, and remarkably, shows how acquired symbolic value of money, perhaps because of associations with power or control, can influence responses to both emotional and physical pain.”
She also noted: “These findings have great importance for a social system such as ours that is characterized by wide disparities in financial wellbeing.”
Zhou, Vohs and Baumeister determined that interpersonal rejection and physical pain caused desire for money to increase. They said: “Money can possibly substitute for social acceptance in conferring the ability to obtain benefits from the social system. Moreover, past work has suggested that responses to physical pain and social distress share common underlying mechanisms.”
“Handling money (compared with handling paper) reduced distress over social exclusion and diminished the physical pain of immersion in hot water. Being reminded of having spent money, however, intensified both social distress and physical pain,” the authors said.
More information: The full text of the evaluation of “The Symbolic Power of Money: Reminders of Money Alter Social Distress and Physical Pain” is available free for 90 days at http://www.f1000medicine.com/article/r2111rwty080l4q/id/1163818 DOI: 10.1111/j.1467-9280.2009.02353.x
Source: Faculty of 1000: Biology and Medicine