Friday, October 10, 2008

Making of a Miser: Nature vs. Nurture

I found this article in the Wall Street Journal and found it interesting:

Scott Rick, a postdoctoral student at the University of Pennsylvania's Wharton School who has done research on what makes people cheap, says that childhood plays a big role. If you have two thrifty parents, you're likely to be thrifty as well.

Likewise, people who lived through the Great Depression were often thrifty their entire lives. Since the 1930s, each successive generation has gotten to be more free-spending. The current financial crisis could change that. "Right now, there are probably a lot of children who are going to be tightwads," says Mr. Rick.

But our childhood isn't the only factor. George Loewenstein, a professor of economics and psychology at Carnegie Mellon University, says people have innate tendencies. "It's almost like people are born tightwads or cheapskates," says Dr. Loewenstein, who published a paper on
the subject with Mr. Rick and another author.

I agree with the author that spending money does not necessarily make you happier. Especially if you are spending money on things you can't afford. I think it has to be about balance like everything else....