Mental accounting: a study confirms its validity
September 14, 2026
Why can saving 5 euros on a 15-euro purchase seem more worthwhile than saving the same 5 euros on a 125-euro purchase? And why can losing a ticket for a show seem more costly than losing the same amount in cash?
These apparent inconsistencies are examples of mental accounting: the tendency to organise money into separate psychological “accounts”, based on where it comes from, what it is intended for, or the context in which it is used. Although every euro has the same objective economic value, people do not always perceive it or spend it in the same way.
The research, coordinated by Enrico Rubaltelli, scientific head of the JDM LAB at the Department of Developmental and Socialisation Psychology of the University of Padua, was conducted under the guidance of Giulia Priolo of Copenhagen Business School, Martina Vacondio of the University of Trento, Federica Stablum of University College London, and Simone D’Ambrogio of the University of Oxford. Thanks to the collaboration of a large international group of researchers who translated and adapted the materials and coordinated data collection in the countries involved, the study made a fundamental contribution to the statistical analyses.
The research group wanted to assess how far Thaler’s classical theory was still applicable in a profoundly changed economic context.
Mental accounting describes people’s tendency to mentally separate money into categories such as rent, leisure, savings or unexpected income. This process can help with planning expenditure and exercising self-control, but it can also generate decisions that depart from the economic principle according to which money is perfectly interchangeable.
Much has changed since the first studies on mental accounting were conducted. Cash and cheques have progressively been replaced by cards, home banking, digital payment platforms and subscription services. In addition, the original evidence came mainly from relatively small US samples, often made up of university students.
The research team examined whether the same psychological principles can still be observed today and whether they can be generalised to very different cultural and economic contexts.
The study involved 5,589 adults from 21 countries: Austria, Brazil, Canada, China, Denmark, Egypt, France, Germany, India, Indonesia, Italy, Lithuania, Morocco, the Netherlands, Portugal, Romania, Spain, Sweden, Switzerland, the United States and Vietnam.
Participants were presented with seven classic mental accounting scenarios concerning, for example, discounts, lost tickets, gym memberships, drinks bought in different places, and gains or losses presented separately or in aggregate form. The scenarios were translated and adapted to the different cultural contexts, while the monetary amounts were calibrated on the basis of income levels and currencies in each country.
The effects were confirmed with a very high percentage (90.5%); however, there were some differences compared with the past that deserve to be understood.
The effects generally appeared more limited than those reported in the original studies, but they remained clearly observable in populations that differed greatly from one another.
«We were not looking for a surprising new effect,” Enrico Rubaltelli explains. “We wanted to understand whether a highly influential idea still deserved the trust that has been placed in it over the years. Our results indicate that mental accounting continues to be a useful model for understanding consumer decisions, but they also show that the strength of these effects can vary depending on the economic and social context.»
Individual differences relating to age, education, income and financial literacy did not substantially explain the variations observed between countries.
Instead, a possible relationship with national economic conditions was found: in nations with GDP per capita below 50,000 dollars, the use of mental accounts increases as GDP rises; once GDP per capita exceeds 50,000 dollars, the effect stabilises and no differences are found between nations.
A second exploratory analysis indicated that the scenarios can be organised along three dimensions: the individual or socially interactive nature of the decision; whether people decide for themselves or assess someone else’s experience; and the role of the decision-maker in determining or evaluating a price.
Expenditure planning systems, debt management programmes and digital banking tools often divide money into categories, goals or spending “containers”. These strategies can make financial information easier to understand and support self-control.
At the same time, understanding the mechanisms of mental accounting can help consumers recognise situations in which their choices are influenced by the way a problem is presented. A discount does not objectively become larger simply because it is applied to a less expensive product, just as a sunk cost does not change in value because it has been placed in a specific mental “account”.
Financial institutions and public decision-makers could use this knowledge to design clearer economic planning tools, support debt management and help citizens recognise misleading or fraudulent financial practices. However, such applications should take into account that the strength of mental accounting effects can vary depending on the economic environment and the type of decision.
«Our project also shows the importance of international collaboration in the behavioural sciences,” says Martina Vacondio. “Research groups in the various countries helped to ensure that the scenarios were linguistically accurate, culturally appropriate and economically realistic. A study of this scale was possible only thanks to the expertise, time and knowledge of local contexts made available by colleagues in many countries.»
«The most encouraging aspect is not only confirming that a classical theory has passed a particularly rigorous test, but that a major collaborative effort has enabled us to understand where it works, with what degree of intensity, and which questions future research will need to address,» Rubaltelli concludes.
