HEALTHY LIVING

Sadness Could Influence Financial Decisions, Study Suggests

11/24/2012 10:06 am ET

It's reasonable to expect that sadness can take a toll on our mental well-being, relationships with others, even our productivity at work. But a new study shows that it could also affect our wallets.

A new study in the journal Psychological Science suggests that sadness may trigger a person to make less-than-wise financial choices.

Specifically, the researchers found that sadness may make a person more likely to let future financial gains fall by the wayside so that they can experience immediate gratification -- something known as the "present bias."

The study included three separate experiments. For one of them, researchers found that study participants who watched a sad video -- thereby making them feel sadness -- seemed to be more impatient and myopic (near-sighted).

When these participants were then asked to make financial decisions, more of them made choices that would grant them greater short-term gains and fewer long-term gains, than those who were not primed to feel sad.

"These experiments, combining methods from psychology and economics, revealed that the sadder person is not necessarily the wiser person when it comes to financial choices," the authors wrote in the study.

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