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money
You treat the same amount of money differently.
Mental accounting causes people to categorize money into different 'accounts' based on the source, leading to irrational spending.
People are far more likely to spend a windfall gain—like a small lottery win—on non-essentials than they are to spend the exact same amount if it was earned through labor.
You budget by origin rather than by value.
Where this comes from
- Study
- Richard Thaler, 1985
- What the check found
- The attribution to Richard Thaler's 1985 work is correct, and the description of mental accounting as a source of non-fungible categorization is the consensus view of the theory.
- Confidence
- Solid, with limits
Related
One of these every day, and every one names the study it came from. When a finding is contested, it says so.