The New York Times:
Paying with cash is painful — and that’s a good thing, according to new research.
When people pay for items using cold, hard cash rather than by card or online, they feel more of a sting and therefore assign more value to the purchase, according to Avni M. Shah, an assistant marketing professor at the University of Toronto Scarborough. Her findings were born of personal experience: One day she forgot her debit card, so she paid for a latte with physical dollars — and felt her drink tasted better that day. Could her method of payment have been the reason?
Professor Shah, who also teaches at the Rotman School of Management, published her study in The Journal of Consumer Research. Her co-authors are Noah Eisenkraft, James R. Bettman and Tanya L. Chartrand.
In another study, Professor Shah gave $5 to her research participants to donate to one of three causes. One group received the amount in cash, and the other in the form of a voucher. Then she gave the participants a ribbon that they could wear on their lapels to show that they had made a donation.
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