This study systematically analyzes the house-money effect, a phenomenon in which people become more financially risk-taking and wasteful after receiving unexpected income. This study aims to identify the general tendencies and factors that influence this effect. A total of 57 continuous and 18 dichotomous outcome studies were included in this meta-analysis. A random-effects model was used to pool the effect sizes, and a low-to-moderate house-money effect (g = 0.37, rr = 1.33) was confirmed. However, high heterogeneity was observed, and the strength of the house-money effect varied widely, depending on the situation. The subgroup and meta-regression analyses revealed several moderators. While a strong effect was observed in the controlled experimental environment, the effect was weakened when it was closer to a real-world environment. For continuous outcomes, the effect was particularly pronounced in students and Asian regions, and the effect size decreased as the publication year increased, suggesting that the universality of the house-money effect is limited. In the publication-bias analysis, a slight bias was detected using multiple methods. This suggests that the true effect size may be smaller, supporting the theory that the house-money effect is reproducible only under certain conditions.

Authors:
Kasumi Dan, Keio University, Japan

About the Presenter(s)
Kasumi Dan, a graduate student at Keio University, specializes in economics. With interests in decision-making and human behavior, they recently completed a meta-analysis on the house money effect and are preparing to study human responses to AI.

See this presentation on the full schedule – Wednesday Schedule

Bookmark