I'll Bet You a Dollar I Know Which Dollar You'll Bet With
I remember the days when I believed in free will. Oh, how nice it was to think that I wasn't a data point. But I keep reading stories about how easily consumer behavior can be predicted and influenced and I'm just about to stop making decisions all the time. (I once thought it would be a good idea to write a book about this: Indecision Man—making no decisions whatsoever for a month. Or a year. Then I realized that it was actually a bad idea.)
So here's a fascinating new one, via The Money Illusion—you're more likely to spend dirty, wrinkly money than you are to spend a nice, crisp, clean sawbuck. And even more likely to spend five crisp $1 bills. So says a study in the Journal of Consumer Research. Here's Forbes on the study:
We think of money as being infinitely interchangeable. Any $5 bill is equivalent to any other. Five $20 bills are the same as one $100 bill. Unfortunately, it’s not true, at least from the standpoint of human behavior. We tend to spend small bills faster than large bills. So, if your wallet is full of $5 bills you’ll likely buy more stuff than if you have the same amount of money in larger bills.
The magnitude of the difference in spending rates is startling. The Canadian reseachers found that subjects spent an average of $3.68 when given a crisp, new $20 bill, but more than double that—$8.35—when given an old bill.
Economy need stimulus? Take new bills out of circulation and replace them with old bills—or, if the amount of built-up bacteria on an old bill is way too gross (and it is), produce new ones that look and feel old. Bang! You'll have people spending in no time at all! (Please tell the Nobel people that they can drop the medal off at the Colfax location of the Tattered Cover bookstore in Denver, Colorado, and I will be by to pick it up.)