Simon J. Blanchard

Associate Professor of Marketing
Graham Family Faculty Fellow
Georgetown University

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I study how consumers handle spending, budgets, credit cards, and resulting debts. I do so via mixed-methods, which includes experimentation and econometrics.

Sample Projects about Personal Finance and Debt Management
  1. Carlson, Kurt A., Jared Wolfe, Simon J. Blanchard, Joel C. Huber and Dan Ariely (2015). ”The Budget Contraction Effect: How Contracting Budgets Lead to Less Varied Choice.” Journal of Marketing Research, 52 (3), 337-348. [PDF]

    When consumers see there budget decrease (e.g., from $120 to $80 in disposable), there allocate their spending of $80 to fewer product categories than when they have the same $80 after a budget increase (e.g., from $40 to $80 in disposable). That is, when consumers experience a decrease in budget, they tend to cut entire categories because the feeling of loss is weaker by doing a few "focused cuts" across a few categories than cutting a little across everything they buy. Our research speaks to important reference points that consumers make as they experience budget volatility, and consumption patterns changes (e.g., cut entire categories) as they experience said volatility.

  2. Kettle, Keri L., Remi Trudel, Simon J. Blanchard, Gerald Haubl (2016). "Repayment Concentration and Consumer Motivation to Get Out of Debt." Journal of Consumer Research, 43 (3), 460-477. [PDF]

    We study the effect of concentrating repayment (vs dispersing) repayments, across multiple debt accounts, on consumers' motivation to get out of debt. Across 3 experimental studies and data from HelloWallet, we find that consumers worked harder at getting out of debt (e.g., did more tasks for money, allocated more of their disposable income to repayments) after they saw a large chunk of debt cut from focusing their repayments on the smallest account. We show that it's not because focusing on small accounts creates feeling of progress through closing debt accounts, as that's quite rare for most consumers. Rather, it's the gain in motivation from "cutting out" a large chunk of a single balance that is motivating. This can explain why the infamous "snowball method" for debt repayment can be an effective tool at minimizing consumer debt.

  3. Remi Trudel, Simon Blanchard, Keri Kettle (2018), "Labeling Debt as Ordinary versus Exceptional to Motivate Consumers to Increase Credit Card Repayments." Under review.

    In this manuscript, we propose a series of interventions designed to increase consumers’ debt repayment amounts. Building on prior literature on how consumers categorize purchases, three experimental studies show that interventions which label consumer credit card debts as either ordinary or exceptional motivate consumers to make larger credit card repayments – but only to the extent that their debt predominantly consists of ordinary expenditures. In our fourth study, using field data from real indebted consumers, we show that making people aware of their exceptional debt by sending unusual spending notification emails can increase repayment amounts – but, consistent with our experiments, only if most of the debt actually comes from ordinary expenses.

  4. Remi Trudel and Simon Blanchard (2018), "Framing Tax refunds as ordinary income to increase repayments (and reduce spending)." Work in progress.

    There is a lot of research in economics and finance on how tax refunds tend to see as windfalls, and as a consequence, consumers prefer to spend the money on exceptional expenses than on saving. We show that when consumers receive such refunds, asking them what they plan to do with it by framing it it as ordinary income (e.g., Congratulations on completing your tax return! Your tax return refund is ordinary income that is being returned to you. Why not use part of it to make an extra payment toward your uncovered credit card balance?) as opposed to a windfall (e.g., Congratulations on completing your tax return! Your tax return refund is windfall income that is being given to you.) leads consumers both to spend less on exceptional spending and increase their debt repayment and spending. We have preliminary results from an intervention at a debt management service (where we detected banking transaction and sent notifications) from an intercept study from people walking out of HnR block during the tax season, and an experimental study.