The Longer You Are Broke, the More You Learn Self Control

A STUDY BY GULEN SARIAL ABI CASTS DOUBT ON PREVIOUS RESEARCH ON CONSUMERS FACED WITH FINANCIAL RESTRICTIONS

Gülen Sarial Abi investigates the behavior of consumers who perceive that their financial situation restricts their desired consumption. Financial restriction does not equal poverty: it is a feeling based on self-perception. In an ongoing project titled Do Financial Restrictions Deteriorate or Improve Self-Control?, Prof. Sarial Abi looks at the self-control behavior of individuals who experience financial restrictions.
 
It has already been shown that such people are also worse at controlling themselves. They are not able to manage their finances, they tend to over-consume, and they are more likely to purchase unhealthy products. “Conducting lab and field studies in addition to analyzing two longitudinal datasets from Italy and Germany, we show that this behavior depends on the duration of the state of restriction. Those who perceive a financial constriction for a long period of time perform better in self-control.
 
There are three possible reasons why. First, the individuals might adapt to the feeling of being restricted. Second, they might become sensitized. Third, they might learn to cope with their situation and have more experiential knowledge. We showed that the best explanation is the latter”. Professor Sarial Abi used the same Italian and German datasets, plus online and field experiments, to also study the perception of time in individuals who experience financial restrictions. The previous literature says that those who have scarce resources focus on the present and neglect the future. “We show that, rather than totally neglecting the future, those who have financial restrictions have an imbalanced view of time. They perceive that the future is far away and thus they have optimistic views about it. When we make people realize that the future is not that far away, they become less likely to take risks”.

Read more about this topic:
Stefania Borghini. From the Net to Customer Behavior, Seeking the Perfect Consumer
Ioannis Evangelidis. Different Products with Common Features: Sales Techniques and Consumer Decisions
Zachary Estes. We Buy What We Grasp: How Our Hands Lead Us to Choose Certain Products
 

by Claudio Todesco