Shoppers actually spend more when trying to limit costs: Study
Having a list when shopping may make sense but setting a price limit often backfires, according to new research from Brigham Young University. Just thinking about prices leaves you likely to spend more than you would otherwise.
The researchers found that consumers spent up to 50% more when they started shopping with a price in mind than those who didn’t. There's no problem with budgeting, they say, but focussing too much on price and you'll end up with less in your pocket.
If we decide we’ll spend about $500 on a new TV, we look only at TVs around that price range. Of course, once we do that, we start to notice that higher-priced sets within that range have more features and better quality, so we lean toward those, boosting spending at the same time.
In one experiment, research subjects were given $6 for participating in the study and given an option to purchase a steeply discounted pen on their way out. Those who were asked how much they planned to pay spent an average of $2.10, compared to the average of $1.64 spent by those who were not asked.
“The results were always the same – a preference for higher-quality, higher-priced items,” says team leader Jeffrey Larson. “The most surprising aspect of this study was that people’s decision-making process can change so easily. Doing something as simple as asking, ‘Hey, how much would you budget for this product?’ completely changes their thinking.”
Do you look at specfic price points when shopping? Do you think you end up spending more as a result?
By Gordon Powers, MSN Money