Monday, October 8, 2007

Conquering the consumption virus

Hyper consumerism is raising concerns about the future sustainability of spending. But the solution to limit excess consumption is simple: divide the resource into smaller portions.

Imagine that you are at a theatre to watch a movie, and make your customary stop to buy popcorn and soft drinks. You ask for a large bag of popcorn, but to your surprise the person at the counter hands you your popcorn in three smaller bags saying that the large bags are out of stock. Would this change the amount of popcorn you eat or the speed you eat it at? Our research suggests—Yes!

In our research, we do not wish to contribute to the discussion on why this consumption epidemic happens. Our goal is simple—we wanted to prescribe a simple solution to help curb consumption. We call it partitioning. Quite simply, when a given quantity of resource (food, money, or even other consumables like cigarettes) is divided into smaller quantities by physical partitions, it reduces both the total quantity consumed, as well as the speed of consumption. when we tested our prediction in a series of studies, we found exactly what we predicted.


1). In one study, a number of participants volunteered to participate in a cookie tasting study. Every participant received an identical box of 24 cookies and was asked to consume them over time, noting how much they liked the cookies and when they ate them. Unknown to them, there were differences across participants. Some participants (let’s call them Box A) received 24 cookies in a box. Others, who received Box B, got the same box and the same cookies, but each cookie was individually wrapped in foil. We found that the typical consumer who got Box A took six days to finish the cookies, while those that got Box B took 24 days to finish. A simple sheet of thin foil paper had the power to slow down consumption by a factor of fourfolds!

2).When we partition money, not just food. Students were given 100 cash coupons to participate in a gambling study—an activity that is considered fun but sinful. Some were given all 100 coupons sealed in one envelope, others were given 10 coupons in each of 10 sealed envelopes. We found that once the big envelope was opened, it became easy to spend the 100 coupons. However, with the smaller envelopes, people tended to spend a lot less—in one study, about half as much. We note again the power of glue in reducing spending by 50%!

3).In an ongoing series of studies with labourers who get cash wages, we find that giving them cash divided into sealed envelopes increases their savings rates dramatically as compared to giving them a wad of notes. And in analysis of data from prepaid calling cards, we find that people who purchased five $10 cards rather than one $50 card spaced out their ISD/STD phonecalls over a longer period of time.

In sort we can try it & can call it : DIVIDE & RULE.

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