This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: When it comes to money, humans are not always rational. First introduced decades ago, the influential concept of mental accounting posits that consumers make decisions based on subjective accounts that diverge from objective financial values.
For example, consumers perceive a $100 check for overtime work differently than a $100 tax refund. One is seen as earned, and the other as a discretionary bonus. A new study of 5,589 participants across 21 countries finds evidence that this concept still holds true.
The study is the first large-scale test of mental accounting's replicability and generalizability. Giulia Priolo, Ph.D.; Federica Stablum, Ph.D.; and Enrico Rubaltelli, Ph.D., all from the University of Padova, Italy, led the study. Kai Ruggeri, Ph.D., professor of health policy and management at Columbia University Mailman School of Public Health, served as a senior expert.
The findings appear in the Journal of Consumer Research. The researchers say they were uncertain whether the mental accounting concept would hold up in the current environment, in which technology has completely changed our relationship with money and how we spend it. For example, the norm now is to receive both overtime pay and tax rebates via direct deposit.
"Considering major changes in how we receive and spend money, especially with the proliferation of automated digital payments, a large, robust study of the concept of mental accounting was not only appropriate, it was necessary," says Ruggeri. In the online survey, participants responded to several scenarios, such as making consumer decisions about identical products and prices but at different stores. Similarly, classic measures tested whether saving the same amount on a given product—for example, $5—had the same result if the total cost was $10 or $100.
The survey was completed in local languages, with monetary values in scenarios adjusted relative to the country's gross national product. The researchers found that mental accounting effects were weaker in lower-income countries than in higher-income countries. This may be partly because researchers originally studied mental accounting in higher-income countries.
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