Is Low Self Esteem the Cause of Credit Card Debt Problems?
A recent study published in the Journal of Consumer Research by Derek Rucker and Adam Galinsky of the Kellogg School of Management at Northwestern University suggests that the cause of Americans consumer debt problems is low self esteem. The study found that individuals who felt powerless were willing to pay a premium for items considered status symbols.
I haven’t read the full journal article yet, but I wonder whether the chicken or the egg came first. Does debt and economic problems increase feelings of self esteem or is it truly low self esteem that causes the debt problems. To some extent, my guess is that they reinforce each other. That’s the same conclusion that I’ve drawn about research suggesting that the stress from credit card debt leads to health problems. Because medical problems are the cause of debt for many people, it’s hard to say which condition is the cause of the other.
The other question about the study that I have is that America’s current credit card debt problems seem to have appeared as the result of good times rather than bad. Were Americans feeling powerless during the time from 2002 to 2007 when they racked up their current debt. Or were they simply taking advantage of an endless supply of easy credit?
Read other coverage:
- The Abstract - Desire to Acquire - Powerlessness and Compensatory Consumption
- St. Louis Post-Dispatch
- NY Daily News
