Feeling Immoral About Money: How Moral Emotions Influence Spending Decisions

Abstract:     
Prior literature suggests that consumers who feel negative moral emotions engage in a moral compensation process that is generalized and flexible. In contrast, the current research demonstrates that consumers who feel guilty or angry about money seek compensation in a strikingly specific way. We find that feeling guilty about money increases pro-social spending, but not volunteering of time or spending on personal virtues. Moreover, this increase in pro-social spending only occurs when the guilt is moral in nature and the money being spent is the money consumers feel guilty about. The specific nature of this effect suggests that consumers who feel guilty about money try to cleanse the money rather than try to redeem themselves. Feeling angry about money, on the other hand, is shown to decrease pro-social spending, highlighting the need to distinguish between specific emotions when examining how feelings about money affect consumer spending decisions.

Number of Pages in PDF File: 47

Keywords: moral emotions, emotional accounting, guilt, anger, spending decisions, morality, moral cleansing, money cleansing, money laundering

JEL Classification: M31

working papers series