CarriageTowneNews.com, Kingston, NH

Community News Network

January 20, 2014

Study: Money is addictive

WASHINGTON — There's a fundamental principle in economics that applies to food, clothing and even all those shiny tech gadgets that start with the letter "i": The more of them we have, the less we value them.

But that may not be true when it comes to money. New research from Jeffrey Pfeffer, a professor at Stanford Graduate School of Business, and his colleagues at the University of Toronto and Renmin University of China finds that the more money people make, the more they value it.

The research, published in the journal ILRReview, examined data from a longitudinal survey known as the British Household Panel Survey, as well the results from new experiments. Pfeffer and his colleagues calculated respondents' hourly income, as well as its growth over time, to separate money earned by actual work and money earned from other sources, such as investments. It then compared hourly earnings to respondents' views on how important it was to them to "have a lot of money."

"We thought it was quite possible that money was different because of its symbolic nature — when I pay you, I'm also signaling your worth," Pfeffer says.

And that's what they found. The more that people earned, the more they said money mattered to them. The same correlation was not true when it came to money made from sources unrelated to work. That kind of income, Pfeffer says, has "much less implication for one's sense of mastery or worth."

Pfeffer says the research provides implications for how chief executives and other workers are paid. When it comes to motivating employees, he thinks it's a reminder for managers to emphasize — instead of money — the organization's mission. He recalls the story of a human resource executive who spoke to his Stanford class about how his software company didn't give stock options — an idea that sounded like sacrilege in Silicon Valley. "He said, 'Look, a raise is only a raise for 30 days. After that, it's a salary.' "

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  • Elwood (Al) Shaw, 93

    Meredith, NH — Elwood (Al) Shaw, 93, of Center Harbor, passed away peacefully on Sunday, March 30, 2014, at Forestview Manor in Meredith. He was the beloved husband of the late Greta L. (Sykes) Shaw, to whom he was married for 62 years.

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    Sandown, NH — Jo Ann (Phelps) Hughes of Sandown, New Hampshire passed away on Thursday, March 27, 2014, surrounded by all of her children at home. She was born in Little Bend Kentucky, to Beatrice (Shepherd) Phelps and John (Cat) Phelps in 1934. Jo Ann was predeceased by brothers, Marcus Phelps, Johnny Phelps, Forrest Phelps and sisters, Juanita Phelps, and Jeanette (Phelps) Vincent. She is survived by brother, Donald Quiggins of Georgia; sisters, Geneva (Phelps) Stanley of Kentucky, and Frances (Phelps) Bratcher of Tennessee who had just visited Jo Ann in September of 2013.

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