Heart strings and purse strings: The impact of affect on consumer spending

Abstract

The paper explores the impact of affect (any experience of feeling or emotion) on economic decisions and presents two new findings. First, affect with the same valence (pleasantness) can have opposite impacts on consumption decisions. We identify negative affect with self-nominated mental stress and financial stress in population-level consumer surveys and find that stress increases spending. Consumers use the positive affect generated by consumption to offset the negative affect caused by the stress. This is in contrast to the well-documented impact of negative affect identified by incidental consumer pessimism that decreases consumption. Second, the spending response conditional on experie..