People who do not have many friends, feel alone at work, or are sad about a break-up are more frivolous with their money, a new study has claimed.
Researchers from Hong Kong found that when people feel lonely or rejected they put a greater value on money. This is because they associate being wealthy with being socially accepted, the ‘Daily Mail’ reported.
As a result, lonely, sad and rejected people gamble and make riskier, but potentially more profitable, financial decisions in a bid to fit in, researchers said.
“Feeling socially rejected triggers riskier financial decision-making,” said authors of the study including Rod Duclos from Hong Kong University of Science and Technology, Echo Wen Wan of University of Hong Kong, and Yuwei Jiang from Hong Kong Polytechnic University.
“In the absence of social support, consumers seek significantly more money to secure what they want out of the social system surrounding them,” they said.
During the study, participants were asked to talk about a social situation that left them feeling included, and one that made them feel left out.
After each anecdote they were asked to choose between bets with high odds that offered low rewards, or low-odds bets that gave higher payouts.
When the members felt rejected or lonely, they were more likely to choose the higher risk options.
However, when they discussed a situation in which they felt happy and accepted, participants were more careful in their money-making decisions.
“Understanding how consumers trade risk for reward could help them make more informed choices,” the authors explained.
“Consumers might [therefore] choose to delay important financial decisions following a break-up or a falling out with friends, colleagues, or family,” the study said.
The study was published in the Journal of Consumer Research.
Keywords: Frivolous with money, Researchers from Hong Kong, financial decision-making, Rod Duclos, Hong Kong University of Science and Technology, Echo Wen Wan, University of Hong Kong, Yuwei Jiang, Hong Kong Polytechnic University, money-making decisions, Journal of Consumer Research,