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Does Spending More Really Signify More Wealth?

UCLA Anderson’s Professor Hal Hershfield and his colleagues explore the nature of people to believe spending more signifies more wealth and how that in-turn affects spending.

Before the pandemic, the Center for Retirement Research at Boston College estimated that half of U.S. households weren’t on track to have enough for retirement. Since the pandemic, that estimate has risen to 55%.

Researchers have spent decades trying to figure out how to persuade people to save more money for retirement and emergencies. But this study shows most spend more as they make more. They also believe other people spending more means they have more wealth. The problem with the lifestyle creep shows personality and behavioral battles with self-control, financial literacy, and the penchant for materialism.

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