The Vicious Cycle of Status Envy: Why We Buy Things We Can't Afford
December is when we're pushed to buy, buy, buy on the pretense of spreading holiday cheer and showing how much we care. Let's be honest: Showing off what you can afford in the form of pricey presents is as much of an American pastime as altruistic gifting. But what if you can't afford them, and buy them anyway? A new set of studies find that people drop a ton of cash to offset their lower status—which, of course, leaves them more broke and more likely to remain part of the same status group as before.
The effect is worse when a person's racial or economic status is on his mind. In one study, the researchers recruited both white and black participants at a shopping mall, then handed a list of racial stereotypes about black people to half of the participants. When the shoppers were offered a set of designer headphones, one group offered to pay a lot more than the others: black customers who had been reminded of their race. The study concluded that marginalized groups who attempt to assert their worth with their wallets feel more satisfied in the short term, even if their purchasing decision effectively kicks them when they're down.
These studies focused on race, but anyone can feel vulnerable to status loss—an unemployed person, for instance, or a kid who's emotionally abused. We may even exceed our budget limit in reaction to a rude store clerk or a reprimand from our boss. Bling-as-social ladder may offer a quick fix, but this holiday season, let's remember that retail therapy is cold comfort in the end.