Psychology of money

Abstract

Around ten thousand years ago, several communities around the world transitioned from a hunter-gatherer lifestyle into an agricultural one. Along with this lifestyle transition, many communities evolved the desire to efficiently store and exchange value. Thus, people invented money, and by now, money plays an important role in most people's lives. 'Money' refers to the institutions people use to store wealth, to measure value, and to exchange goods and services. Also, money encompasses the material objects tied to these institutions, such as coins and banknotes. This article provides a broad overview of the psychological literature on money. In particular, it points the reader to research that addresses the following questions: When and how does money motivate human behavior? When and how does money distract people from working? How does money acquire cultural associations? How do these cultural associations manifest themselves on the behavioral level? How do young children and older adults process money? How does spending money affect people’s feelings? What are the psychological consequences of being wealthy versus being poor? What is the nature of money-related problematic behaviors, such as compulsive spending and pathological gambling? To answer these questions, this bibliography mainly highlights classic and recent psychological research, but it also cites insights from economics, neuroscience, and anthropology.