The pleasure of consumption and the pain of paying

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The typical modern consumer has a seemingly insatiable appetite for debt.

A possible key to understanding that hunger is a behavioural concept called "pain of paying."

The theory, spelled out in a famous 1998 research paper by U.S. academics Drazen Prelec and George Loewenstein, is that when consumers make purchases, they experience both the pleasure of consumption and the pain of paying – not physical pain, of course, but an emotional negative that reduces the net pleasure derived from whatever it is we just bought.

When consumption and payment are closely tied to each other – like, say, when you buy a sandwich with cash – the pain and the pleasure are derived at about the same time, and they serve to balance and regulate each other. Consumers can easily gauge whether the pleasure is worth the pain.

But when they are separated from each other – like, say, when you charge a meal to your credit card – the pain is dissociated from the pleasure, and it becomes easier for consumers to give themselves pleasures from consumption while removing thoughts of pain from the immediate transaction.

Queen's University professor Nicole Robitaille, who has conducted research on this phenomenon, says pain of paying is further reduced by electronic forms of payment – which allow us to instantly receive pleasures of consumption while making payments even more remote and intangible.

"As we start paying for more and more things online, more and more things with credit cards, more and more things without actually using the cash, that pain is mitigated," Robitaille says. "When you reduce how much affective pain someone experiences, they're more willing to spend.

"You're not faced with actually spending that cash and to think about it. It kind of just disappears… It makes it easier to ignore what you're paying, what your bank account looks like when you're making that payment… You can avoid bad news easier."