Thursday, January 31, 2008

"Bonus" and "Rebate"

Think of a "Bonus" as a "Rebate" to Save More
Tax rebates, year-end bonuses, mail-in savings—they're all just money coming in, but the difference in labels can have a serious impact on what we do with it, according to a Harvard researcher quoted in today's New York Times. In a study, half of the participants were given $50 and told it was a "bonus," and the other half received a "rebate." The results:

When unexpectedly contacted one week later, participants who got a "rebate" reported spending less than half of what those who got a "bonus" reported spending ($9.55 versus $22.04, respectively).

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