The Consumption Consequences of Couples Pooling Finances

In brief

Spending from a joint account changes what people buy. Across field and lab experiments and real transaction records, partners paying from a shared account chose practical purchases over pleasurable ones more often than partners paying from their own account, because pooled money has to be justified to someone else. Make the treat easier to justify and the difference disappears.

Abstract

When couples decide to share their lives, they must also decide how to pool their finances. In this article, we ask: Does the type of bank account from which one spends (joint vs. separate) affect the type of products one chooses to buy (utilitarian vs. hedonic)? Real‐world evidence from analyzing bank transaction records (study 5), as well as data collected from experiments in the field (studies 1 and 2) and lab (studies 3 and 4), converge to support the hypothesis that couple members who spend from a joint bank account are more likely to choose utilitarian (vs. hedonic) products, than those who spend from a separate bank account. We find that these different spending patterns are driven by an increased need to justify spending to one's partner that is experienced when money is pooled together. If a hedonic product becomes easier to justify (study 4), the effect of account type on spending patterns disappears. These findings have important theoretical and practical implications for better understanding financial decision‐making within romantic couples.

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PDF · Published version (DOI) · More on couples and household finance