New frugality reshaping a generation?
New frugality reshaping a generation?
Two interesting stories about how recession can shape future consumer behaviour.
Newsweek examines how recessions affect future lifestyle choices. It explores how tough times in early adulthood can reshape people's core values, making them more frugal and humane.
Using the example of people who came of age in the Great Depression: the grandmothers and grandfathers who can't use a tea bag too many times, yet are enjoying comfortable retirements in warm climates. And the children of the 1950s who are the optimistic boomers who embodied an age of continual upward mobility and possibility. They have often spent more than they earned, because for them it has been a truism that times can only get better.
Newsweek says that it is no accident that the psychology of entire generations is shaped by the milieu in which they grew up; economic research tells us that our lifelong behaviors are determined in large part by the seismic events - good or bad - of our youth. So, given that we have just experienced the worst economic period in 70 years, it's no surprise that people have begun to wonder what sort of consumers, investors, and citizens will be bred by the Great Recession.
Another interesting story from The Washington Post: author Michele Heller looks at whether consumers' new push toward frugality could be the silver lining of the recession, arguing that if we embrace change and maintain better financial habits, we will benefit in the long term, and the economy will too.
She argues that financial experts say that wiser habits in each household will eventually help strengthen an economy that still shows vulnerabilities.Dan Ariely, a professor of behavioral economics at Duke University, believes that there are many who have been so shaken by the recession that they will alter their spending and savings patterns. "For many people, this was a shock. People in their 20s to 40s, who grew up in this period when the stock market has been good for most of their lives, had a great belief in the stock market," he said. "This failure has shocked people to the ground and will stay with them."
Wednesday, 13 January 2010 14:57