This is your brain on money

Researchers used to think of money purely in economic terms. Now they're looking at its impact on our psyche — and making some surprising findings.

Depending on who you ask, it is the root of all evil, it is power, it talks, it can't buy happiness or it is no object. One thing, however, is indisputable. Money — even the mere suggestion of it — can have a profound effect on the way we think, feel and behave. This is not conjecture; while money's grip on the human psyche has been a favourite topic for philosophers and writers through the ages, researchers are now weighing in with data clearly showing how money influences us, often in unexpected ways.

"Traditionally, academics thought about money in economic terms," says Sanford DeVoe, associate professor of organizational behaviour and HR management at the University of Toronto's Rotman School of Management. "But now, in the last 10 years, we're beginning to delve into the psychological dimension of money — what is its symbolic meaning, and what associations do people have with it?"

Those associations can have a huge impact on our thought processes and resulting actions, and we are often completely unaware of all this hullabaloo happening inside our heads. Studies have clearly shown that even when people are not consciously thinking of money — if there's a poster in the background depicting images of money, for example — their behaviour changes. On the plus side, people might work harder or show greater independence and persistence. On the flip side, they might be less honest, compassionate and empathetic.

Nonconscious thoughts of money can even have the same effects as pain-relieving drugs, as one study has shown. Neuroscience offers similar evidence: brain-imaging scans indicate that thoughts of money activate our reward centres — the same parts of the brain that fire when we consume sugar or drugs.

For DeVoe, however, the most striking — and surprising — aspect of this emerging research is the consistency in the findings across age groups and cultures. "I was astounded to see that psychological associations with money emerge as young as age three or four, and that similar associations can be found in more than 100 countries. That's very rare," he says. "We need to become more self-aware about the ways money expresses itself in our everyday lives. Once we have that awareness, money's power [over us] is muted."

Herewith, then, is a brief compendium of some of the more intriguing experiments and findings that have come out in the past few years on the psychology of money. In other words, here is what the thought of money can do to our brain.


The research (US/Canada, 2008): In one experiment from this groundbreaking study, university students filled out questionnaires while seated at desks with computers displaying one of three screensavers: fish swimming, money falling or no image. The students were then offered the choice to work on a task alone or with someone else. Those subliminally reminded of money were three times more likely to complete the work alone than those who were not given the reminder (84% versus 28%).

Other parts of the study showed similar results. For example, participants who had first been reminded of money were more likely to say they preferred solo activities, such as reading a favourite novel, over shared activities, such as going out for coffee with a friend. Furthermore, when subjects were paid $2 in quarters and later had an opportunity to donate to the university's student fund, those who had been nonconsciously reminded of money donated 39% of the $2 (77 ¢), compared with 67% of the $2 ($1.34) for the control group.

The researchers' take: "Money rewards successful task completion...hence we predicted that reminding people of money would encourage individual performance efforts. Although promoting personal performance may be beneficial for getting ahead, it may not be the best for getting along with others."


The research (China/US, 2009): Never mind shopping therapy; simply handling money is enough to elicit drug-like effects. In this study, university students in China who first counted out 80 $100 bills reported less physical pain when they put their fingers in hot water than those who were first given 80 pieces of paper to count instead. Similarly, those in the money group felt less emotional distress in a social-exclusion experiment than those in the paper group.

The researchers' take: "The mere idea of money has considerable psychological power, enough to alter reactions to social exclusion and even to physical pain."


The research (Canada/US, 2010): Participants were asked to determine how rewards might be most fairly allocated among a group of sales associates whose individual sales numbers differed. There were four types of resources: money, credit-card reward points, vacation days and chocolates. When the rewards were in the form of food or vacation time, the participants were more likely to think an even-steven split was fair than when the resources were a medium of exchange — money or points.

The researcher's take: "Money is associated with the marketplace, where inputs should calibrate with outputs," says DeVoe, who headed the study. (In other words, it's not fair for everyone to get the same amount — they need to earn it.) "But food or time invoke other norms that are much more social in nature."


The research (US, 2012): University students played a computer game where they could earn more money by being dishonest. Some of them, however, were first "primed" to think about money by unscrambling word phrases about finances or looking at pictures with a money theme. The group that was primed with monetary concepts lied twice as much during the game than the control group.

The researchers' take: "Money primes trigger a business decision-frame [or cost-benefit analysis] leading to greater unethical behaviour."


The research (US, 2012): Eighty undergraduate students at a US university were asked to write a story using a list of nine stimulus words. In one group, the words emphasized economic logic (e.g., cost-benefit analysis); in the other group, the words were neutral. Participants were then asked to draft a letter to scholarship students informing them that the school was facing financial hardships and would need to take away their scholarships. The participants who had written stories using financial stimulus terms expressed less compassion and reported lower feelings of empathy than the control group did.

The researchers' take: "When individuals are in an economic mindset, they deem the expression of emotion as unprofessional and inappropriate, and fear that they will be perceived as foolish for outwardly expressing compassion and interpersonal sensitivity."


The research (France, 2013): This field study, conducted on a pedestrian street in France, involved two types of participants: those who just stopped at an ATM to withdraw or deposit money, and those who had simply walked by the bank machine without using it. When a "bystander" who was in on the experiment asked the subjects to participate in a short survey, those who had handled money at the ATM were about half as likely to accept as those who had not used it. In another experiment, the bystander walked in front of the subjects and dropped a bus pass. Just 60% of those who had held cash stopped to tell her, compared with 96% of those who had not handled money.

The researchers' take: "Money probably activated feelings of self-sufficiency, which in turn decreased the participants' motivation for social contacts."


The research (US, 2013): Adults in a university study pool were asked to unscramble short phrases related or unrelated to money. They then had to rate on a seven-point scale how much they agreed with statements such as "many people suffer through absolutely no fault of their own." The survey was aimed at gauging their belief that the world is just. Those in the money group were more vehement in their opinions that victims deserve their fate as compared with the control group. In another experiment, subjects performed the same phrase unscrambling and then completed a survey aimed at measuring their preferences for hierarchy (e.g., "Some groups of people are inferior to others"). Those in the money group believed more strongly that socially advantaged groups should dominate disadvantaged groups.

The researchers' take: "Merely activating the concept of money in people's minds…causes them to think that existing social structures — particularly those that result from the functioning of free markets — are appropriate and inherently fair."

Tamar Satov is a senior editor at CPA Magazine.

Other studies

What’s the Use of Happiness? It Can’t Buy You Money
Kathleen D. Vohs and Roy F. Baumeister (2011), Journal of Consumer Psychology, 21 (2), 139-141

The Psychological Consequences of Money
Kathleen D. Vohs, Nicole L. Mead, and Miranda R. Goode (2006), Science, 314 (5802), 1154-1156

Money, Moral Transgressions, and Blame
Wenwen Xie, Boya Yu, Xinyue Zhou, Constantine Sedikides, and Kathleen D. Vohs (in press), Journal of Consumer Psychology

When does money make money more important? Survey and experimental evidence
DeVoe, S. E., Pfeffer, J., & Lee, B. Y.; Industrial and Labor Relations Review; Issue: 5; 2013; Pages: 1076-1094

Time, money, and happiness: How does putting a price on time affect our ability to smell roses?
DeVoe, S.E. & House, J.; Journal of Experimental Social Psychology; Issue: 48; 2012; Pages: 466-474

Hourly versus salaried payment and decisions about trading off time and money over time
DeVoe, S.E., Lee, B.Y., & Pfeffer, J.; Industrial and Labor Relations Review; Issue: 63; 2010; Pages: 625-640

Higher social class predicts increased unethical behavior
Paul K. Piff, Daniel M. Stancata, Stéphane Côté, Rodolfo Mendoza-Denton and Dacher Keltner, Proceedings of the National Academy of Sciences 2012

Class and compassion: Socioeconomic factors predict responses to suffering
Stellar, JE; Manzo, VM; Kraus, MW; Keltner, D; Emotion, Vol 12(3), Jun 2012, 449-459