Is it natural to compare yourself to your neighbors? Maybe, but in some cases doing so might be dangerous to your bank account. A new study from San Francisco State University indicates that people, especially those who are younger and poorer, are more likely to spend compulsively if they live in expensive neighborhoods. A summary of their research appears in the Journal of Consumer Culture.
Although many people with lower incomes have material aspirations, they lack the resources to attain their dreams of a more lavish lifestyle. This inability, the researchers suggest, may create feelings of inadequacy, humiliation, and "relative deprivation" — the feeling of being less well-off than those around you. It is a need to belong that causes the poor to be susceptible to consumer messages and also to spend beyond their means.
To better understand individual attitudes of materialism, the researchers began their study by determining a neighborhood's socioeconomic status; along with analyzing per-capita income and poverty rates, they also counted up the number of financial institutions present. Next, they collected data via a survey that measured participants' materialistic values, views about money and spending, and savings habits. Then, they compared all the numbers. After controlling for age, gender, and individual socioeconomic status, the researchers found residents of wealthier neighborhoods were more likely to be materialistic, spend compulsively, and manage their money poorly than those living in less pricey areas. In particular, the study identified those who are most susceptible: younger people, urbanites, and those who are relatively poor compared to their surroundings.
Associate Professor of Psychology Ryan Howell who acted as lead author of the study believes the link between neighborhood status and materialism may be based on the tendency to compare ourselves to others. Seeing a neighbor drive by in a luxury car, those who feel relative deprivation wish to project an image of wealth themselves, even if that image is false. "Because you feel the need to live up to that standard, you end up impulsively buying material items, even though they don't actually make you happier," Howell said in a prepared statement. Importantly, he noted the results of his study indicate people of a higher socioeconomic status were less susceptible to such behavior and also less materialistic.
Going forward, Howell will explore ways to counter a neighborhood's effect on an individual's materialistic values, which might be accomplished through interventions that help people feel more grateful for what they have. Of course, there's another solution to this dilemma: Move to a less expensive neighborhood.
Source: Zhang JW, Howell R, Howell C. Living in Wealthy Neighborhoods Increases Material Desires and Maladaptive Consumption. Journal on Consumer Culture. 2014.