In a forthcoming study in the Journal of Marketing Research, Ms. Sussman found that even though people were theoretically earning 1% interest from their savings, they were willing to borrow money at much higher rates to keep their savings at a certain level.
“I’m not at all saying people shouldn’t save,” says Ms. Sussman. “But even people with an appropriate liquidity cushion want to keep more money in their savings accounts because it makes them feel responsible, even though it might lead them to do these behaviors that are potentially economically costly.”