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Can cash contribute to reduce global obesity?

Categories : Cash facilitates budgetary control
June 27, 2017
Tags : Cash, Cash substitution, Consumers, Usage
A 2010 Journal of Consumer Research study found that card payments increase the number of impulsive and unhealthy food purchases. Does cash indirectly help improve our health?
Communication Team / Equipo de Comunicación

Over 2 billion people worldwide are either overweight or obese, and it is leading to health problems and a rising number of deaths, according to a new study published in the New England Journal of Medicine. Obesity rates doubled in 73 of the 195 countries the study analyzed; the US topped the rankings with the largest percentage increase of any country. Unhealthy food purchases are considered to be a key factor driving this global problem.

In 2010, the Journal of Consumer Research published an article written by three marketing students analyzing the influence of different payment instruments on the proportion of impulsive purchases, especially regarding unhealthy food. During the study, shopping baskets of 1,000 households were examined over a period of 6 months.

Findings demonstrate that card payments increase the number of impulsive purchases, of which “vice products” – such as cookies and pies – are part. When using a painless payment method, consumers have nothing that restrains them from buying and tend to indulge in all their desires. On the contrary, pain of payment proves to curb the impulsive responses. Cash is considered as a painful payment mode because of its emotional aspect. Consumers can tangibly feel the money going out of their wallet and are more conscious about prices. Cash purchases are thus less impulsive and contain a smaller proportion of vice products. 

More recently, Martina Eschelbach from the Deutsche Bundesbank demonstrated that cash has a disciplinary effect and protects consumers from unnecessary spending in a paper aptly entitled “Pay cash, buy less trash? Evidence from German payment diary data”. She concludes that ‘the probability of an unplanned purchase subsequently being considered unnecessary is around 10% lower when paid in cash.’