Preserving the Non-Physical: Essence and Value Perceptions

Abstract

The value of possessions is not always immediately apparent, making them something greater than the sum of their physical parts. People share the pervasive belief that things carry an essence which contributes to their fundamental character or identity. My dissertation explores how consumers perceive essence in both money and products and how those perceptions affect their consumption decisions. In the first essay of my dissertation, I challenge the assumption that essence is a stable product attribute and show that people perceive product essence as impermanent. Because consumers believe that essence behaves like a physical product attribute, they infer that essence can decay through natural physical processes like aging. My studies also show that briefly removing a product from its original packaging will cause consumers to believe that essence is lost, even when then product remains physically pristine. This has important implications for consumer behavior, showing that consumers value products that lost parts of a positive essence less. My research also offers a solution to this problem: interventions which protect a product physically can also preserve its essence and fundamental identity. That is, I find that product packaging preserves essence. Taken together, my studies reveal a novel benefit of packaging that goes beyond packaging’s ability to protect a product from physical harm or perceived contamination from outside sources. These findings contribute to our understanding of why consumers prefer packaged products even if they believe packaging is unnecessary. The second chapter of my dissertation reveals that the essence of money has consequences for financial decision making. Money should be fungible, but I find that its value is impacted by its origin. Specifically, my research shows that effort imbues money with a special essence, making it subjectively more valuable to people. This magnified valuation appears to be driven by a belief that greater effort should produce greater compensation. So, when compensation is held constant while required effort varies, workers reconcile the discrepancy by assigning greater essential value to it. This process means that workers’ subjective valuation of hard-earned money is greater. My studies rule out several alternative explanations for this effect, such as contrast effects, greater attachment, virtuousness of the money, feelings about the money, and effort justification. I show that valuing money differently based on effort has consequences for financial decisions—they are particularly loss averse. People are more likely to retain hard-earned money if they could lose it by gambling and they prefer to pay with other means in order to retain hard-earned money for longer. However, when being presented with a safe investment, individuals are more likely to invest hard-earned money.