IN THE New York Times today, John Tierney explains why shopping is such sweet seduction:

I will not try to justify my need for the mood clock, the “Dodgeball” DVD, the desk-clip lamp and the smoothie maker. I would rather pin these choices on two culprits.


The other culprit — the main villain, really — was my insula. This region of the brain is activated when you smell something bad, see a disgusting picture or anticipate a painful shock. It was typically activated in the brains of the other shoppers when they saw a price that seemed too high. I’d like to think of my insula as particularly stoic, the strong, silent type, but he’s probably just an oblivious slob.

The lazy insula is a rarer affliction than you’d guess by looking at Americans’ indebtedness. Tightwads slightly outnumber spendthrifts, according to surveys by George Loewenstein and his colleagues at Carnegie Mellon, Scott Rick and Cynthia Cryder. These behavioral economists think tightwads aren’t any more rational than spendthrifts, because neither group is carefully weighing the long-term benefits of a Foreman grill versus college tuition. Dr. Loewenstein says the brain scans demonstrate that both kinds of shoppers are guided by instant emotions.

“We developed this propensity to experience direct pain when we spend money,” Dr. Loewenstein said. “This explains why tightwads won’t spend money even when they should. It also helps to explain why we overspend on credit cards, and why people prefer all-you-can-eat buffets instead of paying for each item they order. We like schemes that remove the immediate pain of paying.”

 This suggests that the traditional explanation for Americans' low savings rate may be the correct one:  Americans use more credit, which lowers the pain of buying.  But the culprit may not be evil moneylenders.  One might instead turn on the friendly bankruptcy attorneys; there is emerging evidence that making it harder to declare bankruptcy has made banks more willing to extend credit, but borrowers less willing to take on more loans.