GRACKLE MANUSCRIPT REVIEW HISTORY MANUSCRIPT (ROUND 1) Abstract

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1 1 GRACKLE MANUSCRIPT REVIEW HISTORY MANUSCRIPT (ROUND 1) Abstract Despite evidence that currency denomination can influence spending, researchers have yet to examine whether the visual aesthetics of money can do the same. This is important because currency denominations and money aesthetics are invariably linked in that smaller denominations suffer greater wear and tear than larger denominations. Using real money in the context of real purchases, this article demonstrates that people put a premium on crisp currency to such an extent that it overrides the influence of denomination. Importantly, this occurs not only because crisp bills are perceived to be more novel and thus more desirable than worn bills, but also because people believe that crisp bills will make them look better. These results challenge the dominant belief that people only perceive the nominal value of money.

2 2 When the US Federal Reserve receives a cash deposit from a bank, it checks the individual notes to see whether they are still fit for circulation. About one-third of notes received by the Fed are deemed unfit and subsequently destroyed (FedPoint 2008). This is why most of the currency produced each year in the US replaces old, worn-out currency. Of course, some notes are particularly susceptible to wear and tear. A $1 bill gets the greatest use, thus remains in circulation for about 21 months, whereas a $100 bill gets the least use, and thus lasts approximately 7.4 years (FedPoint 2008). In general, lower denomination currency wears out faster than higher denomination currency. This is not surprising given that most day-to-day transactions favor a lower denomination exchange. Nevertheless, the Fed statistics highlight the relationship between a banknote s denomination and its aesthetic appearance. This is important because people tend not to think of money as perishable as something that gets old and worn, in need of replacement. Although there is evidence that denomination can influence spending behavior, researchers have yet to examine whether the visual aesthetics of money can do the same. If so, this would have dramatic implications for theory and practice, particularly given the dominant belief that people tend only to perceive the nominal value of money what Fischer (1928) originally coined, the money illusion. CONCEPTUAL BACKGROUND Money illusion has been used to explain a variety of anomalies. One of the most common is the observation that income satisfaction is not based on purchasing power but rather on the number of monetary units obtained. That is, people are generally satisfied with a higher nominal pay, despite their real income decreasing due to inflation (Shafir, Diamond and Tversky 1997). Money illusion has also been observed when a product is priced in different currencies. People tend to believe that products priced in low currency units (e.g., Euros) are cheaper than products priced in high currency units (e.g., Swedish Crowns), despite the real price being static between the two (Gamble et al. 2002; Raghubir and Srivastava, 2002). Money illusion has also been linked to the observation that people evaluate transactions more positively when framed in smaller units ($1 a day) as opposed to the whole ($365 per year; Gourville 1998). The one thing that each of these examples have in common is that they violate the economic principle of descriptive invariance, which is the idea that different representations of the same choice problem should lead to equivalent preferences (Kahneman and Tversky 1979). One of the most recent examples of a violation of descriptive invariance is the observations that people spend less when given a larger denomination (e.g., a $20 bill) than when given the equivalent amount in smaller denomination notes (e.g., four $5 bills; Mishra, Mishra and Nayakankuppam 2006; Raghubir and Srivastava 2009). One explanation is that people perceive higher value in large single denominations because there is greater processing fluency with the whole rather than several subsequent parts (Mishra et al. 2006; see also Alter and Oppenheimer 2008). The general idea is that greater processing fluency translates into positive affect towards the money, which in turn leads people to overvalue large single denominations. This line of reasoning is based on evidence that ease of processing enhances the extremity of evaluation (Reber, Winkielman and Schwarz 1998). Raghubir and Srivastava (2009, 702) propose an alternate explanation. They argue that large single denominations are simply perceived as less fungible than smaller denominations. They go on to suggest that the denomination effect may result from mental accounting (Thaler 1985; Thaler and Shefrin 1981). People may perceive a large denomination of money as real

3 3 money, whereas an equivalent amount in smaller denominations is seen as petty cash or loose change (Raghubir and Srivastava 2009). Add to this that people have norms that govern their spending patterns, with tighter controls for the spending of real money versus petty cash, and this particular violation of descriptive invariance may simply derive from a need to exercise selfcontrol in spending (Raghubir and Srivastava 2009; Thaler and Shefrin 1981). This phenomenon has been aptly coined the denomination effect (Raghubir and Srivastava 2009). The Value of Visual Aesthetics We began this discussion by highlighting how the Fed statistics link denomination and aesthetic appearance. Researchers exploring the influence of denomination have yet to consider the role of visual aesthetics. This is important because there is substantial evidence to suggest that visual aesthetics can enhance subjective assessments of value (Winkielman and Cacioppo 2001). This evidence comes from both theory and practice. For instance, American Apparel only employs visually appealing models in their advertising campaigns (Dean 2005; Kang 2006). Similarly, Abercombie & Fitch (A&F) focuses on hiring young, attractive, mainstream athletic types, and the cheerleaders who might be their girlfriends (Edwards 2003, 16). A&F is so committed to this idea that photos of new applicants must be submitted to company headquarters for top management approval (Edwards 2003). Presumably, companies adopt these policies because they believe that visually appealing employees will enhance the value of their product offerings. Indeed, these beliefs are not unfounded. Many researchers have examined how visually pleasing ads positively influence brand attitudes and enhance purchase intentions (Belch, Belch and Villareal 1987; Petty, Cacioppo and Schumann 1983). Researchers have also shown that consumers are more positive, are more likely to purchase, and exhibit a higher willingness to pay, when a product is physically touched by someone who is visually attractive (Argo, Dahl, and Morales 2008). Visual aesthetics has also been linked to impulsivity such that impulse buying frequently involves products that have strong aesthetic or styling elements (Bloch, Brunel, and Arnold 2003, 553). Furthermore, there is evidence to suggest that certain consumers believe that beautiful objects positively influence the quality of their daily lives (Yalch and Brunel 1996). In fact, many consumers believe that they personally benefit from owning beautiful objects (Csikszentmihalyi and Robinson 1990). Even popular press has argued that aesthetics is one of the fundamental criterion by which consumers evaluate and differentiate between products (Kalins 2003). In general, people want to acquire things that are beautiful. Visual Aesthetics and Financial Products Despite the vast amount of evidence linking visual aesthetics to product preference, the value of visual aesthetics is not restricted to designer apparel or toaster ovens. There is a growing body of evidence to suggest that visual aesthetics permeates all facets of human life, even financial appraisal. Most recently, researchers have shown that the visual aesthetics of investment documents can positively influence stock valuation and investment behavior (Townsend and Shu 2010). The authors go on to show that if attention is drawn to the influence of aesthetics, this effect is washed. There is also evidence that people have lay theories that link value and aesthetics, such that the size of a coin is believed to positively correlate with its inherent value (Kirkland and Flanagan 1979). This relationship between the visual aesthetics of

4 4 coins and valuation has been shown to operate on numerous dimensions, from color, to thickness, to even the coin s physical shape (Bruce et al. 1983). Although linking visual aesthetics to financial valuation, researchers have yet to explore whether the visual aesthetics of money can alter spending behavior. This is the goal of the current research. If the denomination effect is predicated on the idea that people have norms that govern their spending patterns (Raghubir and Srivastava 2009), then altering the visual aesthetics of a banknote should not influence the effects of denomination. That is, changing whether money is aesthetically pleasant or unpleasant should not change the norms governing our spending behavior. If, however, people devalue worn currency and overvalue crisp currency, then the aesthetics of money may influence purchasing behavior more so than denomination because it directly relates to valuation. The following studies were designed to test this prediction. STUDY 1 The purpose of study 1 was to lay the foundation by exploring whether the visual aesthetics of money can alter behavior. The manipulation of worn and crisp currency was accomplished by altering the visual appearance of brand new banknotes obtained from a local bank. Care was taken to ensure that the notes were not old in terms of printed date. Hence, all bills were generally from the same year and thus retained the same stylized printing. In the crisp money condition, the bills were left unaltered. In the worn money condition, the notes were folded and crumpled until they were relatively equivalent to one another in visual appearance. This was done not only to standardize the notes, but also to give the impression that they had been in circulation for quite some time. Once gathered, a pre test (n = 48) was conducted to confirm the aesthetic manipulation. The pretest randomly displayed 30 of the notes (five new $5 bills, five old $5 bills, five new $10 bills, five old $10 bills, five new $20 bills, five old $20 bills). Participants were asked to make repeated preference judgments ( how pretty is this object? ) on a scale from 1 (not at all pretty) to 9 (very pretty). This process was adapted from Reber, Winkielman, and Schwarz (1998; Experiment 1). Not surprisingly, the analysis revealed that the crisp banknotes were judged as prettier (M = 6.06) than the worn banknotes (M = 4.91; F(1, 47) = 33.63, p <.001). This effect did not vary by denomination (F < 1.66). The pretest results confirmed that the manipulation of worn and crisp currency altered aesthetic preference (as indicated by prettiness judgments; Reber et al. 1998). Design and Procedures. Undergraduate students (N = 84; 42% female) participated in this study for a chance to win $20. Participants were randomly assigned to one of four conditions in a 2 (prize: worn $10 vs. crisp $10) 2 (gamble: worn $20 vs. crisp $20) between-subjects design. The task was introduced as an adaptive intelligence test. Participants were told that they would see fifteen anagram puzzles. If they were to solve 80 90% of the anagrams correctly, they would receive $10. However, if they solved over 90%, they would receive $20. Unbeknownst to the participants, two of the anagrams were impossible to solve. Hence, participants could never score higher than 87% (i.e., they could never solve more than 13 of the fifteen anagrams). Nevertheless, all participants were able to score above 80%. Thus, the task was designed such that a $10 endowment was guaranteed. After participants had finished the anagram task, they were awarded the $10 prize in the form of either a worn or crisp $10 bill. They then received the following statement:

5 5 Congratulations you scored over 80%. Hence, you receive $10 for your performance. Although you didn t score above 90% to earn the $20 prize, you have the option to gamble the $10 you just earned on ONE final anagram question. If you get the question wrong, however, you will lose the $10, but if you get it right, you will get this $20 bill." The research assistant then opened an adjacent envelope in view of the participant to reveal either a worn or crisp $20 bill as indication of what could be won. Participants that accepted the gamble received the final anagram and then filled out a short demographic questionnaire. Those that declined went straight to the questionnaire. Results and Discussion. A binary logistic regression (0 = no gamble; 1 = gamble) revealed that participants were about four times (1/Odds Ratio) more likely to gamble if they were endowed with a worn $10 bill rather than a crisp $10 bill (B = -1.49, SE =.49, p <.005, OR =.23). Participants were also three times more likely to gamble if the gamble was paid in a crisp $20 bill as opposed to a worn $20 bill (B = 1.11, SE =.49, p <.05, OR = 3.02). These effects were qualified by a significant prize gamble interaction (B = 1.48, SE =.71, p <.05). The nature of the interaction is best illustrated when the data is broken down by condition. Participants who were awarded a worn bill and enticed to gamble with a crisp bill (worn $10 crisp $20) were about four times more likely to gamble than participants who were awarded and enticed only with worn bills (worn $10 worn $20; B = -1.48, SE =.71, p <.05, OR =.23). These same participants were about six times more likely to gamble than participants who were awarded and enticed with crisp bills (crisp $10 crisp $20; B = -1.87, SE =.72, p <.01, OR =.15). Finally, as indication of the strength of money aesthetics, these same participants were 13 times more likely to gamble than participants who were awarded a crisp bill and enticed to gamble with a worn bill (crisp $10 worn $20; B = -2.61, SE =.76, p <.001, OR =.07). These findings suggest that the visual aesthetics of money can alter the degree to which people seek to acquire and retain aesthetically pleasant banknotes, even if that meant risking financial loss. Given the results support the prediction that individuals desire crisp currency over worn currency, it seemed reasonable that the visual aesthetics of money may alter spending behavior, regardless of the denomination. Stated formally: H1: People will spend more when given a worn $20 bill than when given four crisp $5 bills. Conversely, people will spend more when given four worn $5 bills than when given a crisp $20 bill. STUDY 2 The primary purpose of study 2 was to test whether the visual aesthetics of money can change spending behavior, and do so to such an extent that it overrides the influence of denomination. The secondary purpose of study 2 was to offer some insight into why this occurs (i.e., test the mechanism). Hence, it was important to explore actual spending using real money in the context of real products. Method Design and Procedures. Undergraduate students (N = 123; 49% female) participated in this study in exchange for a $20 endowment. Individuals were tested one at a time in a mock

6 6 retail lab. Participants were randomly assigned to one of four conditions in a 2 (money aesthetics: worn vs. crisp) 2 (denomination: four $5 bills vs. a $20 bill) between-subjects design. The study began with the following instructions: In this study, you will participate in a shopping task. You will be given $20 to spend. You can spend as much or as little as you like. You will get to keep the money that you don't spend, as well as any of the products that you choose to buy. Below, you will find a listing of products (and their prices). These products will be available at the front of the room. The study was conducted under the guise that we were interested in how students prioritize their spending. Twenty-six products were purchased from a local retailer. The prices of the products ranged from $3.40 (Lays Chips) to $16.25 (Cadbury Chocolate Box). To reinforce the guise, the product list was made up of both junk food and personal care items (e.g., toothpaste, shampoo, etc.). In addition to spending, time spent deliberating while shopping was captured by a research assistant who was unaware of the research hypotheses. The prediction was that people with worn notes would spend more time deliberating than people with crisp notes, because the people with worn notes are looking to spend and the people with crisp notes are looking to save. Once participants finished the shopping task, they paid for the merchandise and completed a short questionnaire. Similar to the study 1 pretest, the questionnaire began by asking participants to make aesthetic preference judgments about the money (i.e., prettiness judgments; Reber et al. 1998). This was done to secure that the money aesthetic manipulation worked as intended. Participants then recorded their general affective state using the 20-item Positive and Negative Affect Schedule (PANAS; Watson, Clark, and Tellegen 1988). The positive dimension included items like interested, excited, and enthusiastic, whereas the negative dimension included items like distressed, upset, and irritable. The PANAS was included to test whether crisp (worn) money led to more positive (negative) affect than worn (crisp) money. Following the PANAS, participants responded to three 9-point items (familiar/unusual, old/new, regular/irregular) that captured participants overall perception of newness/novelty (Holbrook 1981). The newness scale was included to account for the high premium given to novelty. Indeed, it is less common to get crisp uncirculated bills (even ATMs dispense new crisp bills rather infrequently). Finally, a related although conceptually distinct explanation may be that people see worn money as not having the same value as crisp and clean money. To get at this possibility, perceived value was measured by thirteen 9-point items (anchored 1 = strongly disagree, 9 = strongly agree) that tapped participants perceptions of personal value (has consistent quality; is well made; has poor workmanship; would not last a long time; would perform consistently; one that I would enjoy; something that I would want to use; something that I would feel relaxed about using; would give me pleasure; would help me to feel accepted; would improve the way I am perceived; would make a good impression on others; would give its owner social approval; Sweeney and Soutar 2001). The instrument concluded with basic demographic questions. Results and Discussion Manipulation Check Aesthetic Preference. Consistent with the study 1 pretest, there was a main effect of money aesthetics on prettiness judgments; consumers rated the crisp currency as more aesthetically pleasing (M = 6.43) than the worn currency (M = 3.48; F(1, 118) = 80.16, p <.001, η 2 =.40). Importantly, the main effect of denomination of aesthetic preference was not

7 7 significant (F < 1). Neither was the money aesthetic denomination interaction (F < 1). Hence, the manipulation of money aesthetics worked as intended, and it did not vary by denomination. Consumer Spending. A two-way ANOVA revealed a main effect of money aesthetics on spending; consumers with worn money spent more (M = $11.31) than consumers with crisp money (M = $4.26; F(1, 118) = 49.53, p <.001, η 2 =.28). There was also a main effect of denomination on spending; consumers with $20 made up of four $5 bills spent more (M = $9.17) than consumers with a single $20 bill (M = $6.45; F(1, 118) = 7.30, p <.01, η 2 =.04). These main effects were qualified by a significant money aesthetics denomination interaction (F(1, 118) = 4.13, p <.05, η 2 =.02). Simple effects revealed the nature of the interaction was such that the influence of denomination varied by the aesthetic appearance of the banknotes. Specifically, the denomination effect was robust in the worn currency condition (M 4x$5 = $13.74 vs. M $20 = $8.97; F(1, 118) = 11.21, p <.005, η 2 =.09). However, the denomination effect did not manifest in the crisp currency condition (F < 1). Table 1 presents the treatment means and cell counts across the four experimental conditions. Insert table 1 about here Like study 1, the pattern of effects was even more informative when broken down by condition. In particular, planned contrasts supported hypothesis 1. The denomination effect was most pronounced when consumers had four old $5 bills (M = $13.74) compared to a new $20 bill (M = $3.93; t(119) = -6.89, p <.001). However, contrary to the denomination effect, consumers with an old $20 bill spent more (M = $8.97) than consumers with four new $5 bills (M = $4.60; t(119) = 3.07, p <.005). Taken as a whole, the spending results confirm that the visual aesthetics of money can override the influence of denomination. Time Spent Shopping. The analysis of the time spent deliberating while shopping offered some insight into the spending results. Overall, there was a main effect of money aesthetics on shopping time; consumers with worn money spent more time shopping (M = s) than consumers with crisp money (M = s; F(1, 118) = 20.83, p <.001, η 2 =.15). The main effect of denomination on time spent deliberating was not significant (though directionally favoring the low denomination condition; M 4x$5 = vs. M $20 = ; p =.13). The interaction between money aesthetics and denomination was also not significant (F < 1). It seemed as if people were more interested in retaining the crisp bills. This brings us to the fundamental question of why this is happening. Perceived Personal Value. An initial examination of the 13 items of perceived value (Sweeney and Soutar 2001), revealed that the internal consistency among the measures was rather low given the number of items (α =.67). An exploratory factor analysis revealed the scale could be broken down into two conceptually distinct and intuitive components. The first component relates to the object in question in this case the bills (has consistent quality; is well made; has poor workmanship; would not last a long time; would perform consistently; α =.79). The second component relates to the self, and what it would mean to use the bills (something that I would want to use; something that I would feel relaxed about using; would give me pleasure to

8 8 use; would help me to feel accepted; would improve the way I am perceived; would make a good impression on others; would give its owner social approval; α =.91). The component that related to the evaluation of the object (henceforth referred to as perceived object value) and the component that relates to the ownership of the object (henceforth referred to as perceived personal value) were explored separately as potential mechanisms for the observed influence of money aesthetics on spending. Overall, the manipulation of money aesthetics, denomination, and the interaction between the two did not significantly influence perceived object value (Fs < 2). There was, however, a significant effect of money aesthetics on perceived personal value; consumers believed that crisp currency offered more personal value (M = 5.89) than worn currency (M = 4.77; F(1, 118) = 8.40, p <.005, η 2 =.07). Hence, it was not that the manipulation of money aesthetics altered the perceived value of the banknotes per se, but more so that it altered the value that the bills afforded the individual using them. To test whether perceived personal value mediated the relationship between money aesthetics and spending, we followed the method outlined by MacKinnon, Lockwood, and Williams (2004), and estimated the indirect effect and the standard error of the indirect effect using a bias-corrected bootstrap with 5000 draws. As illustrated in figure 1, the manipulation of money aesthetics significantly predicted perceived personal value (path a; B = 1.11, SE =.38, p <.005). Perceived personal value significantly predicted spending (path b; B = -1.23, SE =.22, p <.001). As we know from the spending results, the manipulation of money aesthetics also predicted spending (path c; B = -7.06, SE = 1.04, p <.001). When combined, the results revealed a significant indirect effect of money aesthetics on spending through perceived personal value (Indirect B = -1.37, SE =.53, p <.01). However, the direct effect of money aesthetics remained significant (path c ; B = -5.68, SE =.97, p <.001), indicating partial mediation. Hence, personal value accounted for some of the relationship between money aesthetics and spending, but not all of it. Nevertheless, the finding is rather interesting given the dominant belief that consumers only see the nominal value of money. Importantly, these effects did not vary by denomination. When denomination was added to the mediation model, it did not alter any of the paths or change the indirect effect of money aesthetics. Insert figure 1 about here Shift in Affective State. We then switched our focus to exploring whether a change in affect could account for the remaining relationship between money aesthetics and spending. Of course, if aesthetically pleasant currency affords greater personal value than aesthetically unpleasant currency, it seems plausible that affect would adjust accordingly. When positive affect (α =.86) and negative affect (α =.75) were added to the regression model, the direct effect of money aesthetics and spending remained significant (path c ; B = -5.15, SE =.96, p <.001), independent of the influence of positive affect (p =.35) and negative affect (p =.20). Hence, including the two affect dimensions did not significantly improve the model. When considered in accord with perceived personal value, it seems that aesthetically pleasant currency does not put people in a more positive state, but merely boosts the desire to retain the bills for self-enhancement. Perceived Newness. Finally, given the possibility that the high premium paid to novelty may have had something to do with the observed influence of money aesthetics, we explored the

9 9 influence of perceived newness (α =.79). Overall, there was a main effect of money aesthetics on newness; the crisp currency was seen as newer (M = 5.39) than the worn currency (M = 3.96; F(1, 118) = 12.16, p <.001, η 2 =.09). This was not particularly surprising given the items (i.e., familiar/unfamiliar, regular/irregular, old/new) because most day-to-day transactions are not made with crisp currency. The main effect of denomination and the interaction between the two were not significant (Fs < 1). When added to the mediation model, there was a significant indirect effect of money aesthetics on spending through perceived newness (Indirect B = -1.32, SE =.46, p <.01). Although diminished, the direct effect of money aesthetics remained significant (path c ; B = -4.78, SE =.92, p <.001). Hence, the novelty of the crisp bills, in accordance with personal value that the notes afforded the individual, both contributed to the overall influence of money aesthetics on spending. However, even when combined, the two variables did not account for all of the influence. GENERAL DISCUSSION Of course, money is not always crisp and clean. Yet its availability (or lack thereof) occupies most aspects of human life. Hence, it is important to question the impact that money has on human behavior. Certainly, money is something more than a collection of objective units. The question is how much more? The results of two simple studies suggest that the physical appearance of money can dramatically alter spending behavior. This finding is important because there is a dominant belief in economics and psychology that people tend only to perceive the nominal value of money (Shafir et al 1997). This belief underscores the emerging interest in the denomination effect. However, beyond providing some of the first evidence that the aesthetics of money can alter spending behavior, this study offers some insight into the relative strength of the denomination effect. Specifically, by altering the aesthetics of money we were able to enhance and attenuate the effect. Furthermore, evidence from the two studies offered some insight into why this occurs. People actively seek to acquire and retain crisp currency, and they do so in part because crisp currency offers greater personal value than worn currency. This suggests that the physical appearance of money matters more than traditionally thought. What does all this mean for the Fed? Given the recent economic recession, there has been considerable discussion around the need to increase domestic spending in the US. There has also been discussion on the need to decrease government spending. Indeed, like the recession itself, these concerns are global. It costs approximately four cents to create a new banknote in the US (FedPoint 2008). This may not seem like much, but the sheer cost in volume sits at the forefront of the Federal debate about whether the US should even have a dollar bill, as opposed to a dollar coin (which would obviously have a much greater life span despite a higher cost in production). The results from this work suggest the Fed may be better served, in terms of both domestic spending and currency production costs, by leaving worn money in circulation. In the end, the results of this work caution that one need only look at currency statistics to realize that smaller denominations receive far greater use than larger denominations, and thus the relative strength of the denomination effect may be inflated by the fact that smaller denominations tend to suffer greater wear and tear. With that said, the results demonstrated here are not intended to explain nor even challenge conventional explanations for the denomination effect. It may be tempting to conclude that the denomination effect has some intrinsic relationship with the aesthetics of money, such that worn currency facilitates the norms governing our spending behavior. Yet we caution against this conclusion. The results may

10 10 simply be driven by the fact that the personal and aesthetic value obtained from crisp currency may override spending norms. This is not to downplay the importance of the results. Indeed, even the basic observation that the visual aesthetics of money affords personal value has significant implications for economic theory, which supports only the nominal value of money. Future research could go a long way in exploring the remaining mechanism between money aesthetics and spending. Given the observation that self-enhancement plays a role in the influence of money aesthetics, the results may actually reverse in a consumption context where consumers are around people they want to impress. Indeed, it seems plausible that individuals may be more apt to break a crisp $20 bill when on a date then to lay down two worn $5 bills for something that is only $10. This research affords several avenues for future exploration. Hence, where it is always desirable to have full mediation, partial mediation lends the opportunity for further theoretical inquiry (Zhao, Lynch, and Chen 2010). The answer may simply be that people just want things that are beautiful. However, it would have been inappropriate in this context to test aesthetic preference as a mediator given that it is not conceptually distinct from the manipulation of money aesthetics. Nevertheless, the findings from this work highlight that a desire for novelty and a desire for self-enhancement both apply to money. Indeed, we may look and feel better if all our purchases were made with crisp and clean bills.

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13 13 Table 1 Treatment Means, Standard Deviations, and Cell Counts for Study 2 Crisp Bills Worn Bills Four $5 bills One $20 bill Four $5 bills One $20 bill Amount Spent $04.61 (5.42) $03.93 (4.21) $13.75 (6.02) $08.97 (6.36) Shopping Time s 97.61s s s Prettiness Judgments (1.61) (1.59) (1.76) (1.86) Proposed Mechanisms Perceived Object Value (1.28) (1.31) (1.34) (1.33) Perceived Personal Value (1.31) (1.25) (1.27) (1.24) Positive Affect (PA) (0.87) (0.79) (0.89) (0.89) Negative Affect (NA) (0.43) (0.49) (0.46) (0.53) Perceived Newness (1.19) (1.11) (1.13) (1.17) Cell Size Note standard deviations are reported in parentheses.

14 14 Figure 1: Mediation Model Note. Solid arrows represent the theoretical model. The dotted lines represent alternative explanations that were empirically ruled out.