Do experiences make people happier than material possessions? In two surveys, respondents from various demographic groups indicated that experiential purchases-those made with the primary intention of acquiring a life experience--made them happier than material purchases. In a follow-up laboratory experiment, participants experienced more positive feelings after pondering an experiential purchase than after pondering a material purchase. In another experiment, participants were more likely to anticipate...

This paper uses a unique data set with housing consumption, well-being measures and time use patterns to explore the implications of homeownership. After controlling for income, housing quality and health, female homeowners are not better off than renters by a variety of measures, both global and situational. Instead, they derive significantly more pain from their house and home – comparable to the unadjusted increase from...

People tend to overestimate the emotional consequences of future life events, exhibiting an impact bias. The authors replicated the impact bias in a real-life context in which undergraduates were randomly assigned to dormitories (or “houses”). Participants appeared to focus on the wrong factors when imagining their future happiness in the houses. They placed far greater weight on highly variable physical features than on less variable...

This paper studies corrective strategies for the illusion of delayed incentives (Soman, 1998), the phenomena that money-for-effort transactions that are unattractive in the present appear attractive when they are in the future. This illusion occurs because future effort is discounted more heavily than future monetary outcomes. In this research, we show that this bias of differential discounting can be corrected by asking consumers to perform...

Female “empowerment” has increasingly become a policy goal, both as an end to itself and as a means to achieving other development goals. Microfinance in particular has often been argued, but not without controversy, to be a tool for empowering women. Here, using a randomized controlled trial, we examine whether access to and marketing of an individually held commitment savings product lead to an increase...

Many people fail to save what they will need for retirement. Research on excessive discounting of the future suggests that removing the lure of immediate rewards by precommitting to decisions or elaborating the value of future rewards both can make decisions more future oriented. The authors explore a third and complementary route, one that deals not with present and future rewards but with present and...

We describe a new anomaly in intertemporal choice—the “date/delay effect”: discount rates that are imputed when time is described using calendar dates (e.g., on October 17) are markedly lower than those revealed when future outcomes are described in terms of the corresponding delay (e.g., in six months). Date deions not only reduce discount rates, but also affect the implied shape of the discount function: When...

With life expectancy dramatically increasing throughout much of the world, people have to make choices with a longer future in mind than they ever had to before. Yet, many indicators suggest that undersaving for the long term often occurs: in America, for instance, many individuals will not be able to maintain their preretirement standard of living in retirement. Previous research has tried to understand problems...

This reprinted article originally appeared in Journal of Experimental Psychology: General, 2012(AUG), 141 (3), 429-432. (The following abstract of the original article appeared in record 2011-26496-001). Americans are not saving enough for retirement. Previous research suggests that this is due, in part, to people’s tendency to think of the future self as more like another person than like the present self, making saving feel like...

Arguably, all judgments and decisions are made in 1 (or some combination) of 2 basic evaluation modes—joint evaluation mode (JE), in which multiple options are presented simultaneously and evaluated comparatively, or separate evaluation mode (SE), in which options are presented in isolation and evaluated separately. This article reviews recent literature showing that people evaluate options differently and exhibit reversals of preferences for options between JE...