Yahoo Finance Math anxiety stopping you from saving?
If the regular price of an item is $50, are you more likely to buy it when it is $10 off or discounted by 20 per cent?
If it hurt your brain a little to figure out the discounts are the same, you're apparently not alone. Researchers have found that the dollars-off format will seal the sale, rather than a percentage-off format. That is because consumers get anxious when they have to do basic math in a retail environment.
People who suffer from math anxiety prefer easier-to-process dollar discounts over percentage ones because of the mental effort it requires to calculate the discount, says Rajneesh Suri of Drexel University, who led a team that researched the behavior published recently in the Journal of the Academy of Marketing Science.
The research also notes that the feeling of anxiousness gets worse when consumers are more highly motivated including times when they want to buy a television, car or house.
Marketers use the regular price as a frame of reference so consumers can gauge the value of their purchase based on that reference. So leaving the onus on consumers to compute net prices or discounts could actually "lead them to save less money or may result in suboptimal decisions," the paper states.
The research, which is based on four separate studies, also showed that while the math anxiety -- defined in the paper as a a feeling of tension, or even dread, that interferes with manipulating numbers and solving mathematical problems -- leads to the dollars preference, it is irrespective of one's math ability.
The paper didn't explore the root of the math anxiety, though Suri says there are signs that a high level of the population is affected by it and it is something that develops over time, and is potentially transferred from person to person.
