Today, 7/18/2019, CBS News released the results of a scientific discovery on spending habits of people and how they reflect a person’s personality. One of the findings was that the less you pay on your home, the more neurotic you are.
The study by researchers at Columbia College and University College London looked at 2,000 people. The study was based on a theory when people spend money to express themselves. The volunteers even shared their financial data to be analyzed by the researchers. Every bit of data was analyzed from spending at Amazon to supermarkets. The paper was recently published in Psychological Science, a journal of the Association for Psychological Science.
A survey was given to each participant in the study considering 5 different traits:
- Openness to experience
The researchers used a machine-technique to match spending habits with these traits. Strangely enough, most matches came in on more narrow traits such as materialism and self-control.
The co-authors noted this could be a serious unethical violation of a person’s rights if used as a means to possibly identify high-risk people for loans, credit cards, etc. Also for the sales of potentially harmful products to the consumer.
“There is an urgent need for policymakers to ensure that individuals (and societies) are protected against potential abuse of such technologies,” the co-authors wrote.
People more extroverted tend to make more dining and drinking purchases. Consumers who were more agreeable donated more to charity. Conscientious consumers socked away more in savings. More materialistic consumers spent more on jewelry and less on donations. Of course, people who live in a poverty area don’t have much of a choice but to live in cheaper housing.
“Now that most people spend their money electronically – with billions of payment cards in circulation worldwide – we can study these spending patterns at scale like never before. Our findings demonstrate for the first time that it is possible to predict people’s personality from their spending,” said Joe Gladstone, who co-led the research.
We all spend money on essential goods, such as food and housing, to fulfill basic needs – but we also spend money in ways that reflect aspects of who we are as individuals.
The findings have clear applications in the banking and financial services industries, which also raises potential ethical challenges. For example, financial services firms could use personality predictions to identify individuals with certain traits, such as low self-control, and then target those individuals across a variety of domains, from online advertising to direct mail.
Ref. MSN/money, CBS News, hindustantimes.com
Photo courtesy of Bing via imoney.my