Borrowing for Experiences

A new study led by Tuck professor Eesha Sharma finds that Americans are more willing to go into debt for experiences than material goods.

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Tuck Professor Eesha Sharma
Tuck Professor Eesha Sharma is an expert in consumer behavior, judgment, and decision-making.

In a new research paper, “Context-Dependent Drivers of Discretionary Debt Decisions: Explaining Willingness to Borrow for Experiential Purchases,” published in the Journal of Consumer Research, Tuck Associate Professor of Business Administration Eesha Sharma and co-author Stephanie Tully of the University of Southern California discovered that consumers are more willing to borrow for experiential versus material purchases, even though experiential purchases tend to have a shorter physical duration.

The findings counter previous research that suggests consumers prefer borrowing for longer-lasting purchases.

"It tells us more about when and why people are willing to borrow," Sharma told CNN in a recent interview. "We challenge the idea that people are more willing to go into debt for a longer lasting thing.”

Read the full story from CNN Money.