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Meet the researcher: Anastasiya Pocheptsova Ghosh & Liang Huang

Posted on February 11, 2019

Selected for the TFI long-term research grant: Dr. Anastasiya Pocheptsova Ghosh & PhD (c) Liang Huang will study when positive feedback on budgeting can lead to an increase in spending. Who are the researchers and what motivated them to apply?

What is the research project about?

Consumers are often advised to constantly check their spending relative to their budgets, and a variety of financial applications are offered in the marketplace that allow real-time tracking of one’s spending. In this project, we examine the effectiveness of providing constant feedback during the budget period for consumers' financial management. We will conduct two field studies in which participants with a set budget are assigned to one of three experimental conditions: (1) participants receive feedback on their cumulative spending, (2) participants receive no feedback, or (3) participants are asked to estimate their cumulative spending. We compare consumers’ spending patterns during the budget period in response to the three different types of feedback. We propose that providing repeated positive feedback to consumers can create a sense of progress in budget management. This subjective feeling of progress could increase spending over the budget period, rather than keeping spending constant, adversely affecting consumers. We also suggest ways to improve the framing of spending feedback, such as focusing away from cumulative progress and toward discrete status check, to stabilize or even decrease consumer spending over the budget period. This project has important implications for helping consumers stay within their budgets and increase their financial well-being by modifying the way the feedback is presented.

“We hypothesize that access to such budget management information can increase spending instead of curbing it.”

What motivated you to apply for the Think Forward Initiative research grant?

We applied for the Think Forward Initiative research grant because we share the same mission as the TFI – to provide impact-driven insights into financial decision-making that would help people make better informed choices about their money and, ultimately improve people’s financial well-being. We believe that research should be grounded in real problems that consumers face and see researchers and industry as collaborators in coming up with solutions to these problems.

How do you expect that your research will contribute to people’s financial well-being?

We focus on one important aspect of consumer financial decision making: budget management. Many budget tracking services claim to help consumers by allowing them to dynamically manage their spending. We find that access to such information can increase spending instead of curbing it. By revealing the biases that the use of budget tracking devices can introduce into people’s financial decision-making, the findings of this project have important implications for guiding consumers to make better financial choices, such as adhering to budgets and increasing savings. We also focus on creating guidelines for the companies designing budget feedback systems to improve how spending information is conveyed to consumers.

Anastasiya Pocheptsova Ghosh is Assistant Professor of Marketing at the Eller College of Management, University of Arizona. She holds a PhD in Marketing from Yale University and has published in leading journals like Journal of Marketing Research, Journal of Behavioral Decision Making, and Journal of Consumer Research. She is particularly interested in how self-control, emotions and motivations affect consumer decision making.

Co-investigator in this research project is Liang Huang, currently pursuing a PhD in Marketing at the University of Arizona. Her areas of expertise include financial decision making, psychology of money and resource management.