By Todd Newton
New research has shown that the way a person spends their money is greatly attributed to their own cultural and ethnic background, and that the level of this influence is dependent on whether income is high or low.
A wide range of people were included across differing cultures and social classes. The research showed that those in the high income bracket allocated their funds in similar ways, and their cultural upbringing had less prevalence on their financial decisions. For those who earned a lower income, comprising of a greater variety of ethnic groups, cultural beliefs played a greater role in the way money was spent.
“[W]hile the high-income group can be treated as one segment as their money managing decisions are largely the same, low-income brackets ought to be considered very differently according to their values,” said Professor Rosalie Tung from Simon Fraser University in Canada.
The research also showed that in lower income brackets religion further impacted differing spending strategies. Evelyn Lehrer, a Professor at the University of Illinois in the USA, found that religion is an influencing factor in many aspects of life, including the financial. She says that religion can be linked to income, and can also affect things like how much money is invested in education.
Surveys confirmed that money, religion, and culture were much more intertwined in the multicultural societies of Australia and Canada. Dr Hamin from Macquarie University says, “The implications of this study are significant from a business, marketing and also societal perspective and as such more research is needed to understand cross-cultural relationships.” This is especially relevant to Australia doing business in the so-called ‘Asian Century’.
[box_dark]The research paper ‘Cross-cultural management of money: The roles of ethnicity, religious affiliation and income levels in asset allocation’ was published in the International Journal of Cross Cultural Management by three researchers. The team comprised of Professor Rosalie L.Tung of Simon Fraser University in Canada, Dr. Chris Baumann and Dr. Hamin Hamin, both of Macquarie University. The team based their study on an online survey for respondents from Australia, Canada and China, with questions about the decisions they make when it comes to money.[/box_dark]