June 27, 2018 by Misti Crane, The Ohio State University

Credit: CC0 Public Domain

Perhaps people like to think of themselves as big spenders. Or maybe they just aren't very honest.

But when researchers compared what study participants reported they were willing to spend on goods with what they actually shelled out in experiments designed to mimic a real-world shopping experience, there was a big gap.

"People said they'd spend about twice as much, on average, as they actually spent when faced with more realistic circumstances," said co-lead researcher Wuyang Hu of The Ohio State University.

Asking people to estimate how much they'd spend on a good or service is a key part of economics research and the results can drive decision making by business, government leaders and others, said Hu, a professor of agricultural, environmental, and development economics at Ohio State.

"Unfortunately, in many circumstances, it's extremely difficult to observe people's actual behavior, so we have to use these hypothetical, made-up scenarios," Hu said. "The problem is, we know that what people say they will spend and what they actually spend don't always line up."

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