Geoffrey Miller, Evolutionary Psychologist at the University of New Mexico, recently wrote a book, Spent, in which he explores the reasons why consumers behave as they do. He argues that consumers buy things because of one of two primary reasons: (1) a product displays our desirable traits and brings us “status” when others see that we own them, or (2) a product pushes our pleasure button and brings us satisfaction even if no one else knows we have them.
Surely, for much of this decade American consumers have been ruled by reason number one as can be illustrated with the following example from Spent.
Why would the world’s most intelligent primate buy a Hummer H1 Alpha sport-utility vehicle for $139,771? It is not a practical mode of transport. It seats only four, needs fifty-one feet in which to turn around, burns a gallon of gas every ten miles, dawdles from 0 to 60 mph in 13.5 seconds, and has poor reliability, according to Consumer Reports. Yet, some people have felt the need to buy it– as the Hummer ads say, “Need is a very subjective word.” Although common sense says we buy things because we think we’ll enjoy owning and using them, research shows that the pleasures of acquisition are usually short-lived at best.
However, this recession has brought significant change to consumer spending and saving behaviors. In fact, the Commerce Department reported that the personal saving rate, which dipped below zero during the housing boom as Americans tapped home equity loans and other easy lines of credit, rose to 6.9 percent in May. That was its highest point since December 1993. The big question is whether Americans will make permanent changes to their behaviors or if this is just a short-term blip. A silver lining to this great recession could be that consumers will worry a little less about Hummer-like spending and a lot more about adherence to a well-thought-out saving and investment plan that will put a greater percentage of Americans in a position in to be financially secure throughout their lives. Because of years of skimping on the part of many, there is some catch-up to do on the savings front. Americans will find that this behavior yields a more durable pleasure.
