Recent research suggests that reminiscing about the past can make us to spend more on products. Nostalgia weakens our desire to hold onto our money, instead fostering social connectedness.
In a recent experiment on this “dreamy” effect (Lasaleta, Sedikides & Vohs, 2014), participants were either asked to view print ad copies that featured nostalgic experiences from the past, or neutral ones that focused on making new memories. The willingness to pay for products was then tested by showing participants a booklet of product options, and measuring their willingness to pay for each one. It was found that participants who viewed the nostalgia-induced ad copy were likely to pay more for the products!
But why exactly does nostalgia make us spend more? The authors of the study suggest that there’s a link between nostalgia, social connectedness, and our desire for money. Nostalgia is the recollection of a fond memory, influencing individuals to look back at memories through a rose-tinted sense of positivity (Hepper et al., 2012). It may seem unsurprising therefore, that nostalgia fosters social connectedness (Juhl et al. 2010), reduces loneliness (Zhou et al. 2008), and increases prosocial behaviour (Stephan et al. 2014). Money, on the other hand, tends to reduce the need for social connectedness and actually promoting isolation (Vohs et al., 2006). The latter part of the great film There Will Be Blood (2007) comes to mind here…
And in the context of nostalgia, social connectedness and money are said to be interchangeable (Lasaleta, Sedikides & Vohs, 2014). What this means is that when people have had their fair share of one, their need for the other lessens. For instance, people living in a country with strong social support (like our friends in Scandinavia) tend to rate financial skills and business success as being less important to them (Vohs et al., 2014).
These findings, based on the principle that people who feel they have achieved one goal are then likely to spend time, resources and effort into pursuing another (Carver and Scheier 2004), means that when a person feels socially connected to others, their desire to hold on to their money will weaken.