The urge to splurge

Just a whiff of a favourite dessert or a glimpse of an attractive person can increase the urge to splurge.

by: Reuters: Natalie Armstrong | 11 Jan 2008

Even consumers on a tight budget are more likely to dig deeper into their pockets if their appetite is stimulated before making a purchase.

"A pleasant environment might make people want to stay longer, but they might not really want to buy," Xiuping Li, researcher at the National University of Singapore said.

"Only those creating tempting environments make people more likely to stay in a store and buy more ... and less likely to think about whether they can pay for it in the future."

Li, who reported the finding in the Journal of Consumer Research, found that stimulating the senses induces people to choose "smaller-sooner" options whether or not it is related to the craving.

"They just want to consume impulsively in order to make themselves happier at this moment," she explained.

Li tested the reaction of women shoppers by placing a hidden chocolate chip scented candle in a room. Nearly 70 percent of the 18 women who got a whiff of the cookie scent said they would buy a new sweater even though they were on a tight budget, compared to 17 percent who were in a room without the hidden candle.

In another experiment 74 people were split into three groups and then asked to enter either a lottery that would pay more money later or another that would pay less but sooner.

One group was given appetite-stimulating photos of food to look at before choosing the lottery, another group looked at pictures of nature and the third were not shown any photographs.

Sixty-one percent of the people who looked at the food photos chose the lottery with the smaller jackpot, compared to 42 percent who viewed the nature images. The group that wasn't shown any photographs was evenly split over the lotteries.

Li said an attractive woman can have a similar impact on male traders.

"If there is a pretty woman around, guys make decisions that focus more on the immediate goals than better, long-term returns," she added.

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