A new study has revealed that individuals who live in affluent areas are more likely to spend compulsively and less likely to save, because of their materialistic desires.
The research by San Francisco State University, which links neighborhood socioeconomic status and materialism, has found that young people living in urban areas will have poor spending habits.
Associate Professor of Psychology Ryan Howell said that the reason behind the link between neighborhood socioeconomic status and materialism is "relative deprivation" or the feeling someone gets when they believe they are less well-off than those around them.
Howell said that if someone is bombarded with images or reminders of wealth, such as an abundance of investment banks nearby or neighbors driving luxury cars, they are likelier to feel a need to spend money they may not have to project an image of wealth they don't actually possess.
He added that people who live in more affluent areas are vulnerable to this implicit social comparison, where they start to see other people spending a lot of money, as they feel the need to live up to that standard and they end up impulsively buying material items.