Spending money makes you feel rewarded

Shopping is ‘like a drug’

Spending money really is like a drug, scientists have concluded, because it stimulates the reward centres of the brain associated with types of addictive activities.
 
Their research also discovered that people tend to spend more if they have higher salaries – even if prices are correspondingly high. That behaviour has been described for years by economists as the ‘money illusion’.
 
The study, led by Professor Armin Falk of the University of Bonn, got 18 volunteers to undertake a series of tests looking at how their purchasing decisions varied when given different salaries and product prices.

They were given two salary levels, one being 50 per cent higher than the other. However, when they received the higher salary, product prices in a catalogue were also 50 per cent higher.

At the same time they underwent brain scans to determine the levels of activity in a part of the brain associated with reward, the ventromedial prefrontal cortex. A purely logical response would have been for the brain to react identically in both situations. But the scientists found that when people were given a nominally higher salary they felt more rewarded when spending, even though their real purchasing power was the same.

Prof Falk concluded: ‘This result means that reward activation generally increases with income, but was significantly higher in situations where nominal incomes and prices were both 50 per cent higher, which supports the hypothesis that activity in the ventromedial prefrontal cortex is subject to money illusion.’

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