How do advertised prices affect consumers' financial well-being and happiness?

Abstract

Commercial advertisements are intended to persuade consumers to purchase products, but their influence can often extend unintentionally and uninvitedly to noncommercial domains. Researchers have uncovered many such unintended ad effects—from lowered self-esteem to increased empathy. This paper adds to the research on unintended ad effects by examining the variable of price in advertisements, and its influence on people's perceived (1) financial well-being, (2) happiness, (3) time–money evaluations (4) proneness to prosocial behavior, and (5) calculative mindset. The first study was conducted on Swedish nationals through the Swedish national survey company, Nepa. The participants were exposed to advertisements with high versus low levels of prices. We find that those exposed to lower-priced ads feel better off financially, and consequently happier, place relatively higher value on time over money, and are more likely to help a friend in need than those exposed to higher-priced ads. The second study was conducted on a US sample using Prolific and further investigated the mechanism behind the effects found in the first study. In this study, we again find an effect of advertised prices on happiness, but not on the other dependent variables. The study results shed new light on the role of advertising and prices on consumer's appraisal of their own financial- and psychological well-being.