The belief that material possessions improve individuals’ personal and social well-being permeates America. However, contrary to this belief, multiple studies show that materialists, compared to non-materialists, have lower social and personal well-being. Compulsive and impulsive spending, increased debt, decreased savings, depression, social anxiety, decreased subjective well-being, less psychological need satisfaction, and other undesirable outcomes have all been linked with materialistic values and materialistic purchasing behaviors.

In light of these findings, many studies have tried to determine what causes these strong materialistic desires in America. In a recent paper, my colleagues and I examined the "geography of materialism." We found a connection between one's neighborhood socioeconomic status and materialism. 

Consistent with past research that has demonstrated there are some negative influences of neighborhood characteristics on individual attitudes and behaviors, our results suggest that various local economic indicators of wealth (e.g., more financial development, higher median per-capita income) affect individuals’ materialistic values, impulsive buying tendency, and savings behavior. These signals of wealth conveyed by the local economy appeared to impact self-evaluations in a manner similar to when one is exposed to idealized advertising images. That is, individuals who were young, poor, and lived around wealth were most vulnerable to engaging in social comparison with idealized, wealthier individuals, and using their scant resources to accumulate possessions to, presumably, convey wealth they did not have.

The reason for the link may have to do with "relative deprivation," or the feeling that people are less well-off than those around them. In this case living in a strong local economy may change individual’s comparison standards and encourage individuals to socially compare with respect to their material belongings, style, and consumption patterns. We suggest that people who live in more affluent areas are vulnerable to this implicit social comparison--if you see other people spending a lot of money, you feed a need to live up to that standard. Because of this, you end up buying a lot of material items, typically on impulse, even though they don't actually make you happier.

Think about it—if someone is bombarded with images or reminders of wealth, such an abundance of investment banks nearby or neighbors driving luxury cars, they are likely to feel a need to spend money they may not have to project an image of wealth they don't actually possess.

So, what is the next step? We want to explore whether there are ways to counter a neighborhood's effect on an individual's materialistic values. This could be done simply by making more people aware of the correlation, or through interventions developed to make people feel more grateful for their status. 

Beyond The Purchase is a website dedicated to understanding the psychology behind spending decisions and the relationship between money and happiness. We study how factors like your values and personality interact with spending decisions to affect your happiness. At Beyond The Purchase you can take quizzes that help you understand what motivates your spending decisions, and you’ll get personalized feedback and tips. For example:

How do you score on the five fundamental dimensions of personality? Take our Big Five personality test and find out.

How do you feel about your past, present, and future? Take the Time Attitudes Survey and learn about your relation with time.

How happy are your Facebook updates? We can analyze your last 25 Facebook status updates and determine how happy you have been.

How happy is your subconscious? Take our Happiness IAT and find out.

Finally, I am pretty excited about our gratitude intervention and some of the benefits you can experience if you take part. If you go to BeyondThePurchase.Org you can find our two-week gratitude intervention. Every night after you complete our brief gratitude journal, we will tell you how grateful you have felt today—we also have a graphic displaying how grateful you have felt each day of the intervention so you can see how much grateful you are. Also, after the intervention we will provide you personalized feedback about how much your gratitude has changed over the last two weeks.    

With these insights, you can better understand the ways in which your financial decisions affect your happiness. To read more about the connection between money and happiness, go to the Beyond the Purchase blog.

"Living in Wealthy Neighborhoods Increases Material Desires and Maladaptive Consumption" by Jia Wei Zhang, Ryan Howell, and Colleen Howell was published online on Feb. 7 in the Journal on Consumer Culture.

You are reading

Can't Buy Happiness?

Happy Thanksgiving: The Benefits of Gratitude

How a gratitude intervention transformed my students.

What Are the Best Ways to Save Money?

Train Your Brain to Spend Smarter: A Chat With

Viral Values: How Do Personal Values Affect Behavior?

Purchases based on core values are shared more often.