Wendy De La Rosa

Wendy De La Rosa, Abigail B. Sussman, Eric Giannella, Gwen Rino (2022), Communicating amounts in terms of commonly used budgeting periods increases intentions to claim government benefits, Proceedings of the National Academy of Sciences (PNAS).

Abstract: Millions of eligible families did not claim their 2021 expanded child tax credit (CTC), collectively forgoing billions of dollars. To address this problem, many policymakers focused on increasing awareness of the CTC by highlighting that families could receive up to $3,600 a year per child. However, people rarely budget on a yearly basis. We propose that communicating the CTC benefit amount in terms of commonly used budgeting periods (e.g., $300 a month) instead of uncommonly used budgeting periods (e.g., $3,600 a year) could increase interest in claiming the CTC. Two large-scale field experiments (n=16,696) among low-income individuals support this account. Using common (vs. uncommon) budgeting periods to describe CTC benefit amounts increased CTC claiming intentions by 16 to 26%. A third large-scale field experiment (n=14,178) demonstrated that encouraging people to consider different budgeting periods moderated these effects. These results suggest that communicating amounts in terms of common budgeting periods is a simple, cost-effective way to stimulate interest in claiming government benefits.

Wendy De La Rosa and Stephanie M. Tully (2022), The Impact of Payment Frequency on Consumer Spending and Subjective Wealth Perceptions, Journal of Consumer Research.

Abstract: Payment frequency is a fundamental yet underexplored feature of consumers’ finances. As higher payment frequencies are becoming more prevalent, consumers are receiving more frequent yet smaller paychecks. An analysis of income and expenditure data of over 30,000 consumers from a financial services provider demonstrates a naturally occurring relationship between higher payment frequencies and increased spending. A series of lab studies support this finding, providing causal evidence that higher (vs. lower) payment frequencies increase spending. The effect of payment frequency on spending is driven by changes in consumers’ subjective wealth perceptions. Specifically, higher payment frequencies reduce consumers’ uncertainty in predicting whether they will have enough resources throughout a period, increasing their subjective wealth perceptions. As such, situational factors that reduce prediction uncertainty for those paid less frequently (e.g., the timing of consumers’ expenses, income levels) moderate the impact of payment frequency. The effects of payment frequency on subjective wealth and spending can occur even when objective wealth favors those with lower payment frequencies. More broadly, the current work underscores a need to understand how timing variations in consumers’ income impact their perceptions, behaviors, and general well-being.

Wendy De La Rosa, Eesha Sharma, Stephanie M. Tully, Eric Giannella, Gwen Rino (2021), Psychological ownership interventions increase interest in claiming government benefits, Proceedings of the National Academy of Sciences (PNAS).

Abstract: Each year, eligible individuals forgo billions of dollars in financial assistance in the form of government benefits. To address this participation gap, we identify psychological ownership of government benefits as a factor that significantly influences individuals’ interest in applying for government benefits. Psychological ownership refers to how much an individual feels that a target is their own. We propose that the more individuals feel that government benefits are their own, the less likely they are to perceive applying for them as an aversive ask for help, and thus, the more likely they are to pursue them. Three large-scale field experiments among low-income individuals demonstrate that higher psychological ownership framing of government benefits significantly increases participants’ pursuit of benefits and outperforms other common psychological interventions. An additional experiment shows that this effect occurs because greater psychological ownership reduces people’s general aversion to asking for assistance. Relative to control messages, these psychological ownership interventions increased interest in claiming government benefits by 20% to 128%. These results suggest that psychological ownership framing is an effective tool in the portfolio of potential behavioral science interventions and a simple way to stimulate interest in claiming benefits.