582 - Effects of payment instruments on unhealthy purchases

DNB Working Papers
Date 16 January 2018
In this online replication study we investigate if the pain of paying in cash – as opposed to paying by cards – can curb impulsive urges to purchase unhealthy or ‘vice’ products. This effect was found by Thomas et al (2011) when comparing the payment instruments cash and credit card. We investigate whether these results also hold in the Netherlands, where the dominant payment methods are cash and debit card. In total, 2,213 participants bought on average 12.3% more unhealthy supermarket products when paying with cards compared to cash. Participants who paid with cards bought more products in general (5.1%), however, the difference for healthy or ‘virtue’ products was not significant. The pattern of the mean scores per payment instrument indicate that paying with cards has a specific effect on vice purchases, but this study does not have the statistical power to show that convincingly. A regression analysis shows that the number of purchases of vice products is partly explained by paying with cards. Other explanatory variables are impulsivity, seduceability, gender, age, education and conscious eating behaviour. Pain of paying did not differ by payment instrument, but was larger for participants that paid with their usual means of payment, either debit card or cash. The present study contributes to the literature of so-called “pay cash, eat less trash” – studies, as it shows that the use of cash limits overall spending and purchases of vice products.
 
Keywords: payment instruments, consumer behaviour, virtual reality study, pain of paying. 
JEL classifications: D12, D14, D18, D83, I12, E58, Z13.