Some intriguing new research from the World Bank suggests soap opera fans can actually learn lessons about money from characters’ mistakes. When familiar characters on the TV act in financially reckless ways, the study says many people learn the lesson and apply it in their own lives.
The finding taps into the well-established idea that people are social creatures, heavily influenced by what those around us are doing – even if we don’t realise it.
Do as I do, buy as I buy
Similar types of situations – where “social norms” or the actions of others influence what someone does – have been recorded around the world. For example, people are twice as likely to buy something on an airplane if the person next to them does, according to a recent working paper. In the Netherlands, researchers found that after people win the lottery, their neighbours are more likely to buy a new car. In the United States, an energy report company reduced energy usage – and therefore money spent on bills – simply by telling customers how little their neighbours were using. In the UK, HMRC improved tax collection rates in a similar way: a line was included on their letters stating that the majority of other people in the recipient’s neighbourhood had paid their taxes.
And other examples of this phenomenon are explored by economist Chris Dillow in a blogpost for eZonomics, Beware your neighbour.
Small screen, big influence
The World Bank study used a popular soap opera in South Africa called Scandal! to test whether viewers learn from the TV drama. The financial storyline spanned two months and featured one of the leading characters borrowing excessively and irresponsibly through hire purchase, gambling, ending up in financial distress, and eventually seeking help to find her way out. Researchers Gunhild Berg and Bilal Zia wrote that viewers of the show had significantly higher financial knowledge of the issues raised and exhibited better financial behaviour by the end of the study. Specifically, Scandal! viewers were almost twice as likely to borrow from formal sources, less likely to engage in gambling, and less prone to enter hire purchase agreements than a different test group that viewed another soap opera.
“This action is good”
Why is the soap opera so persuasive? Learnings of leading scholar in the science of persuasion, Robert Cialdini, might help. In the book The Small Big, Cialdini and co-authors Steve Martin and Noah Goldstein explain the tendency to do what other people around us are doing can be linked back to deep-seated psychological goals. Along with wanting to efficiently make accurate decisions, they argue it is in our human nature to be motivated to see ourselves in a good light, and to have other people see us in a good light as well. So while telling people what most other people do can be a useful way to guide behaviour, adding a message that this action is also a good one to take creates even stronger influence – as this helps us to portray a positive image to ourselves and to others.
In the TV show, the emotional connection to the TV star messenger may have boosted the effectiveness.
The saving conundrum
In the context of personal finance and decisions about saving and spending, a particular challenge emerges. Spending is often visible and therefore more easily spread as a norm, but saving is mostly not visible. A new car, nice shoes, and the latest phone are used in public and shown off to others. But saving is often reflected only in the absence of consumption, making it hard to spot.
Can we encourage “conspicuous saving”?
One question for anyone trying to help others to save, or who want to save more themselves, is: “how do I make saving conspicuous?” I remember a shopping bag from a department store with the words “I just got a bargain at Filene’s Basement”. This slogan shouted that the shopper saved money relative to buying items at full price, but didn’t show how they still spent money relative to buying fewer items or not buying anything at all. Perhaps making savings goals prominent on social media could help – if a Facebook feed was filled with status updates like “I’ve just increased my pension contributions”, would people who see it be likely to squirrel away more?
Or maybe we should take a lesson from the soap opera test and build conspicuous saving in to the storylines of our favourite television shows.
If the research above is any indication, this might just work.