In one of the several variations of the experiment conducted by Fabrizio Di Muro and Theodore Noseworthy, participants entered a mock “convenience store”, where they were given a combination of large, small, crisp, and worn bills and the task of buying three ingredients for a recipe. Then, they either made their transaction knowing that other participants would be viewing a video recording of them at the cashier or not. Those in the so-called “public consumption” condition were significantly more likely to spend the $10 bill when it was crisp than when it was worn, contrary to those who paid “in private.”
The researchers explain that the tendency for us to rid ourselves of worn bills when we are in private is due to the effect of negative contamination. Although we cannot physically observe a worn-out bill being contaminated (at least, we hope not to), we can infer its cleanliness from the way it looks, and this contamination decreases the bill's value. When we are in a social setting, the tables are turned and the researchers suggest that pride drives consumers to break the new $10 bill in public. These results reveal that money may also be influenced by social context, much as the products it is used buy.
So a twenty isn't just a twenty, no matter how it looks.
Di Muro, F. & Noseworthy, T. J. (2012) Money Isn't Everything, but It Helps If It Doesn't Look Used: How the Physical Appearance of Money Influences Spending. Journal of Consumer Research. p.000
*This article was originally highlighted in the American Psychological Science's (APA) APA Monitor digital magazine (In Brief, p.19, January 2013).