UCL School of Management is delighted to welcome Joe Gladstone, from the University of Cambridge, to deliver a research seminar on ‘the consumption consequences of couples pooling financial resources.’
Does the decision to pool money with your significant other affect how it is spent? The results of four studies show that couples who have a joint (vs. a separate) bank account are more likely to spend money on utilitarian purchases, and less likely to spend money on hedonic purchases. Evidence for this effect is found by analyzing over 160,000 bank transaction records, comparing spending patterns of couple members who hold a joint versus a separate account, as well as lab experiments, where couple members are randomly assigned to consider their money as joint versus separate. These different spending patterns are driven by the increased need for justification experienced when money is pooled together. If the need for justification is removed, the effect of account type on spending patterns disappears. These findings are discussed in light of their implications for research on what prompts consumers to choose utilitarian versus hedonic goods, as well as the burgeoning research area of financial decision making within couples.