Social desirability bias is a type of response bias that occurs when survey respondents provide answers that they believe will be viewed favorably by others, rather than providing honest and accurate responses. The term was first coined by Paul Meehl in 1954, and it has been widely studied in the field of psychology and social research.
One of the most common examples of social desirability bias is when people are asked about their voting habits in a survey, they might be more likely to say they voted when they actually did not. The same applies to a wide range of questions, from political opinions to personal habits, people tend to answer in a way that they think is socially acceptable, rather than the truth.
Social desirability bias is not limited to surveys, it can also be present in everyday interactions and decision making, including spending habits and personal finance. People may be more likely to overspend or to take on too much debt in order to maintain a certain image or to keep up with others, known as “keeping up with the Joneses.” This can lead to financial problems and difficulties in the long run.
Defining Keeping Up with the Joneses
“Keeping up with the Joneses” is a phrase that refers to the tendency of some people to try to maintain a certain image or lifestyle, often by acquiring material possessions or engaging in certain behaviors, in order to impress or compete with their peers. The phrase is often used to describe the pressure that people can feel to conform to societal expectations or to keep pace with their neighbors, friends, or others in their social circle.
Examples of keeping up with the Joneses may include buying an expensive car or a larger house than one can afford, purchasing designer clothes or luxury goods, or taking on large amounts of debt to finance these purchases. This phrase was first coined by Arthur “Pop” Momand in a comic strip called “keeping up with the Joneses” in 1913.
Other examples of adverse financial decisions that may be based on keeping up with the Joneses:
- Taking on a large mortgage to buy a bigger house than what one can afford: People may feel pressure to buy a bigger and more expensive house in order to impress their neighbors or to fit in with their social circle, even if it means stretching their finances too thin.
- Leasing or buying a luxury car that one cannot afford: People may feel pressure to drive a flashy car in order to keep up with the Joneses, even if it means taking on a large car loan or leasing payment that they can’t afford.
- Using credit cards to finance luxury purchases: People may feel pressure to buy designer clothes, luxury handbags, or other high-end items in order to keep up with the Joneses, even if it means racking up large amounts of credit card debt that they can’t afford to pay off.
- Over spending on vacations or experiences: People may feel pressure to keep up with the Joneses by going on expensive vacations or experiences, even if it means overspending on travel and accommodations.
- Investing in risky stocks or financial products: People may feel pressure to invest in high-risk stocks or financial products in order to keep up with the Joneses and gain quick returns, even if it means putting their savings at risk.
Money and Social Desirability
Research has shown that people who are more concerned with social image tend to spend more money on conspicuous consumption, or the purchase of goods and services that are visible to others. They may also be more likely to participate in financial behaviors that are perceived as socially desirable, such as investing in stocks or owning a home, even if these behaviors are not financially sound.
Additionally, social desirability bias can also lead people to underreport their true spending habits, making it difficult for financial experts to understand how much people are actually spending and saving. This can impact the way that financial advice is given and the accuracy of financial data.
There are several methods that can be used to reduce the effects of social desirability bias in research and surveys. One of the most effective methods is the use of randomized response techniques, which allow respondents to answer sensitive questions anonymously. Another approach is the use of indirect questionnaires, where the respondent is asked to indicate their level of agreement with statements that are indirectly related to the sensitive topic.
In personal finance, it’s important to be mindful of social desirability bias when making financial decisions. Instead of basing decisions on what you think will be viewed favorably by others, it is important to consider what is best for your financial well-being. This may involve setting clear financial goals, creating a budget, and regularly reviewing your spending habits.
Another important step is to seek out financial education and advice from credible sources. This can help you gain a better understanding of personal finance, and allow you to make more informed decisions.
It’s also important to remember that financial success is not determined by the amount of money you have or the things you own, but by your ability to manage your resources effectively. Keeping up with the Joneses, or trying to maintain a certain image, is not a sustainable or healthy approach to personal finance.
In conclusion, social desirability bias can have a significant impact on spending habits and personal finance. By being aware of this bias and taking steps to mitigate its effects, individuals can make better financial decisions and improve their overall financial well-being.
References:
- Meehl, P. E. (1954). Clinical versus statistical prediction: A theoretical analysis and a review of the evidence. Minneapolis: University of Minnesota Press
- Funder, D. C. (2017). Social Psychology. Routledge.
- Schuman, H., & Presser, S. (1981). Questions and answers in attitude surveys: Experiments on question form, wording, and context. New York: Academic Press.
- Piff, P. K.,
