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The Price of Pocket Money
Subject area: Management and Commerce · Area of research: Consumer Psychology, Adolescent Consumption
Abstract
Adolescent consumption lies at the intersection of behavioural economics, developmental psychology and consumer research. Although conventional economic models explain consumer choice through preferences, prices and budget constraints, actual purchasing decisions may also be shaped by cognitive biases, emotional responses, peer influence and the perceived origin of money. This study examines the relationship between adolescents’ income sources and impulsive spending, with attention to parental allowances, monetary gifts, family transfers and personal earnings. Its theoretical framework draws on mental accounting, the house-money effect, psychological ownership and the pain of paying, while also considering parental financial practices, digital payments, social commerce and targeted advertising. The research uses a quantitative primary-research approach based on survey responses collected from more than 500 teenagers. The survey provides first-hand material for examining adolescents’ money sources and spending behaviour; published research is used to contextualise the topic and interpret the possible mechanisms behind consumer decisions. The paper does not assume that earned income necessarily leads to responsible spending or that unearned income inevitably produces impulsive purchases. Instead, it considers how income origin may interact with financial responsibility, perceived scarcity, budgeting practices and the contemporary consumption environment. The study’s conclusions and recommendations are framed with due regard to the limits of survey-based evidence and the need to distinguish observed associations from causal explanations.
Keywords
Adolescent consumption; impulsive buying; behavioural economics; mental accounting; earned income; unearned income; financial socialisation; digital payments; consumer psychology
How to cite this paper
@article{1724339,
author = {Ayushi Banga},
title = {The Price of Pocket Money},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {4},
pages = {3743-3757},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1724339.pdf},
abstract = {Adolescent consumption lies at the intersection of behavioural economics, developmental psychology and consumer research. Although conventional economic models explain consumer choice through preferences, prices and budget constraints, actual purchasing decisions may also be shaped by cognitive biases, emotional responses, peer influence and the perceived origin of money. This study examines the relationship between adolescents’ income sources and impulsive spending, with attention to parental allowances, monetary gifts, family transfers and personal earnings. Its theoretical framework draws on mental accounting, the house-money effect, psychological ownership and the pain of paying, while also considering parental financial practices, digital payments, social commerce and targeted advertising.
The research uses a quantitative primary-research approach based on survey responses collected from more than 500 teenagers. The survey provides first-hand material for examining adolescents’ money sources and spending behaviour; published research is used to contextualise the topic and interpret the possible mechanisms behind consumer decisions. The paper does not assume that earned income necessarily leads to responsible spending or that unearned income inevitably produces impulsive purchases. Instead, it considers how income origin may interact with financial responsibility, perceived scarcity, budgeting practices and the contemporary consumption environment. The study’s conclusions and recommendations are framed with due regard to the limits of survey-based evidence and the need to distinguish observed associations from causal explanations.},
keywords = {Adolescent consumption; impulsive buying; behavioural economics; mental accounting; earned income; unearned income; financial socialisation; digital payments; consumer psychology},
month = {October},
}