You Can Crowdsource Better Spending Habits

It’s easy to get caught up in trying to keep pace with your peers’ travel, entertainment, and other leisure pursuits. It’s harder to know how those peers’ overall spending compares with yours. But research by Chicago Booth’s Michael Weber and coauthors finds that having insight into the consumption habits of others can help calibrate and moderate your own habits.

The researchers analyzed data from a free application called Status, which lets users compare their monthly spending to that of others with similar financial characteristics. They find that, armed with information about how they stacked up against peers, overspenders cut their consumption by an average of $237 per month, while underspenders adjusted their habits more moderately.