Study finds proximity to payday affects spending patterns


It goes without saying that more money is spent in the hours and days after a paycheck is received than after a certain amount of time has elapsed, given that the check was able to sufficiently swell a checking account to allow some purchasing. But a new study shows that it also affects the type of spending likely to occur.

The report, appearing in the Journal of Marketing September issue, is from the University of Utah.

“Our findings are surprising because previous research has always considered preferences to be relatively stable, not changing much over time,” said UU’s Himanshu Mishra. “We find that not only do preferences change during such a short duration – paycheck to paycheck, but also that they fluctuate between a promotion and a prevention focus.”

Those with a fresh cash infusion into the checking account are more likely to focus on purchases that improve their current standard of living, what the study calls “promotion-focused” acquisitions. The farther the paycheck deposit is in the rear view mirror, the more purchases focus on protecting their current standard of living, or what are called “prevention-focused” acquisition.

A release on the study makes an example out of toothpaste. A promotion-based sale would emphasize a product’s ability to whiten teeth, and would be a good candidate for a payday campaign. Further away from payday, a product’s ability to prevent cavities would be a better candidate for a successful campaign.

RBR-TVBR observation: If there is a dominant business in your market, or class of businesses, with similar payday patterns, it could affect your ability to sell ads. This would be a good thing for your sales staff to be aware of.