Emotional Accounting: How Feelings About Money Influence Consumer Choice
Journal of Marketing Research, Vol. 46, pp. 66-80, February 2009
15 Pages Posted: 17 Feb 2010
Date Written: February 2009
Abstract
Mental accounting posits that people track their expenditures using cognitive categories or “mental accounts.” The authors propose that this cognitive process can be complemented by an approach that examines how feelings about a sum of money, or the money’s “affective tag,” influence its consumption. When people receive money under negative circumstances, this tag can include a negative affect component, which people aim to reduce by engaging in strategic consumption. The authors investigate two such strategies, laundering and hedonic avoidance, and demonstrate their effect on consumption of windfalls. The authors find that people avoid spending their negatively tagged money on hedonic expenditures and prefer to make utilitarian or virtuous expenditures to reduce, or “launder,” their negative feelings about the windfall. The authors call this tagging process and strategic consumption “emotional accounting.”
Keywords: Emotional Accounting, Mental Accounting, Consumer Spending, Windfalls, Behavioral Decision Theory
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