Ariely: People under-save because modern savings and insurance are socially invisible
Dan Ariely · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · Apr 1, 2019 · at 13:02
Behavioral economist Dan Ariely discusses the psychological dynamics that inhibit personal savings, arguing that financial products lack visual social cues.
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“Every time we save or buy insurance, we don't get any positive reinforcement. Not from ourselves and not from the people around us. So think about the time when people used to save in goats, right? If you saved in livestock, you could come home from the office and you could see how many goats your neighbor has, and you could compete. Now you can't compete anymore, right? So this whole category of saving and insurance is invisible.”
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