Watching Less TV Will Not Make You Rich

I like television. I don’t love it. Outside of baseball season I’m not a daily watcher. But it’s a nice thing to have in the house. I even think of it as a relatively cheap form of entertainment. Much cheaper, for example, than its closest analogue, going to the movies.

Apparently, I was wrong. Turns out, each hour of TV watched costs me $4 in increased spending. This from Juliet Schor, currently a Boston College sociologist:

"Television viewing results in an upscaling of desire. And that in turn leads people to buy." Her study found that every additional hour of TV viewing per week boosts spending by roughly $200 a year.

(This from Money Magazine at CNNMoney.com via Consciously Frugal via Fiscal Fizzle via ABDPBT. The opportunity to run a fourth generation link was not the only reason I picked this topic, BTW.)

Schor’s research isn’t exactly breaking news. Best I can figure, it dates from her book, published in 1999 when she was a Harvard economist and professor of women’s studies, The Overspent American: Why We Want What We Don’t Need. (The hardcover had a somewhat less catchy subtitle.)

I have never met Prof. Schor, nor have I read any of her books. But she strikes me as somebody with a particular disdain for mainstream culture, something that is a bit of a problem if you study mainstream culture for a living. And she shares a fetish common in many academic/intellectual types I know, a militant hatred of TV. These people take pride in working into the conversation that they don’t own one, or if they do, it’s a small old set banished to an unloved corner of the house.

Schor’s core thesis is basically the same as that of The Millionaire Next Door, that the common folk are seduced into spending more than they should by a false consciousness implanted by the mass media. If you watch TV you will see people with affluent lifestyles to which you will be unable to resist aspiring. In other words, don’t watch TV, you might find out about cool stuff to buy.

In support of this, Schor points to a statistical relationship between TV watching and spending. The first thing to mention is that this relationship is not, on reflection, all that big. For most people, watching an additional 10 hours of TV per week would be a meaningful change in lifestyle. But spending the additional $40 per week that goes with it would be barely noticeable.

Moreover, as statistics professors delight in pointing out, correlation is not causality. Having not read her book, I will have to assume that Schor did all the calculations correctly, that she isolated out such factors as income and age, and that her results were statistically significant. But even then, all she has found is that two things, TV watching and spending, tend to run together. A little.

Finding that A and B are statistically related supports the thesis that A causes B. But it is also consistent with the theory that B causes A or that both are side effects of C.

I am not sure how I would explain how spending more makes you want to watch more TV, but give me a day or two and I’m sure that I could come up with something nearly as plausible as the other way around. (Perhaps if you spend a lot on a new TV and cable service you will tend to watch it more?)

My guess is that comparatively affluent people with ample free time tend to both watch more TV and spend more money.

I don’t have a problem with the advice to watch less TV. As I said at the top, I’m not a big TV guy myself and I have the unscientific belief that most people would be better off spending the time doing something more useful. Reading blogs, for example. But saying that watching less TV will help you save is a bit more than I can stomach.

Besides, at $4 an hour, it’s still a little cheaper than the movies.

[Photo: Takkk]

Economics, PF Blogs | Frank Curmudgeon | January 6, 2010 12:59 pm

173 Comments

By Rick Francis, January 6, 2010 @ 1:44 pm

I could see exposure to advertising causing someone to spend more… that’s the whole point of advertising isn’t it?
I think she could do a better study by monitoring spending for the same subjects giving them versions of the shows they watch with the commercials edited out. That study could see how an individual’s spending changed without ads, and by how much. They could also do other variations like paying people to not watch any TV to see if the programming itself was a cause.
If the ads have a significant effect then it is be a good argument for getting your entertainment without commercials like a Netflix subscription. It won’t make you rich, but saving up to a few thousand per year is a pretty big potential win. It’s on the order of refinancing or switching insurance providers- both of which are valid PF topics.

-Rick Francis
By Neil, January 6, 2010 @ 3:03 pm

How cheap TV is depends on how much you spend on cable, how much your tv cost to purchase, and how much you watch it. Back when I had a basic cable package for $45/month, and watched maybe 4 hours each month, the tv could have been free and it still cost me more than going to a couple movies. (2 people x 8.50 (never buy tickets at the theatre, they’re a total ripoff) x 2 movies = $34/month)

Since I already had the TV, I actually replaced cable with movie rentals from zip.ca and saved $39 instead.
By KC, January 6, 2010 @ 4:06 pm

Watching TV definitely effects your spending. That’s why companies pay big bucks for advertising campaigns and high profile spots. Ever watch one of those BMW or Lexus commercials at Christmas? I can almost recite the lines. However I have control of my spending and don’t rush out to buy a BMW, but can I say the same about a restaurant ad I see?
By Jim, January 6, 2010 @ 5:22 pm

If you don’t own a TV then what do you point all your furniture at?

I wonder how much money each hour of aimless internet surfing forces me to run out impulsively waste?

This really seems like a bogus statistic to me. We watch 35 hr /week average so does this mean she’s claiming that $7k spending /year is directly caused by watching TV?

Did keeping up with the joneses not exist before TV? I don’t think so.

Or maybe she’s just captured the cost of big screen TVs and cable subscriptions?

I wonder if she’s (or anyone) looked at people with DVR’s versus people without DVRs? If the theory is that constant exposure to advertisement via TV commercials makes you go spend money then someone with a DVR wouldn’t have that problem.
By Jim, January 6, 2010 @ 5:48 pm

Found this working (draft) paper from 1996 :
http://www2.bc.edu/~schorj/pdf/jones.pdf

On page 8 it says: “We also find that each additional hour of television watching reduces annual spending by $219″ I can’t tell if she even controlled for income, i.e. rule out the idea that rich people watch less TV than poor people.

She did a survey of about 2000 people at one company. She seemed to just compare saving levels to a number of variables.

The survey result said that mean TV watching was about 11 hrs / week which is pretty low. I quickly found 3 sources citing average TV viewing of 20+ hrs a week.
By ConsciouslyFrugal, January 6, 2010 @ 6:05 pm

Sorry to hear that reporting on reporting on reporting (on reporting, me thinks) was difficult for you to stomach. I think there’s some pink, chalky crap you can drink to help with that.

From what I can recall, the researcher was commenting primarily on the “upscaling of desire” as it pertains to unrealistic representations of various income levels on television. I found that interesting, as there exists far less evidence to support that theory than the well-documented relationship between watching a gazillion ads and spending a gazillion dollars (honestly? I’m surprised that folks still think that advertising has little to no affect. I assume they mistake personal experience with actual research data). I’d love to see more info on that topic.

You mentioned affluent viewers. I don’t recall any differentiation between income levels, television viewing and spending. It would be interesting to see some data on that as well. I haven’t read anything on how television viewing affects people’s spending at various income levels.

I haven’t read her book either, but I can’t chime in agreement with the stereotypes about intellectuals/academics and a disdain for television viewing. I can only speak from personal experience, which leads me to believe that pretty much everybody who has a boob tube watches too much of it. Yes, even the academics. Passive entertainment has its perks, obviously.
By George, January 6, 2010 @ 6:05 pm

I would add one important point: the opportunity cost of watching TV is massive. The average person watches 8 hours per day. If we spend some of that time learning a new skill, starting a business, or growing a blog, we can improve our finances.

This leads to better finances and less interest in TV. It’s a virtuous circle.
By Jim, January 6, 2010 @ 6:24 pm

George, you could say the same things about any form of entertainment. TV is just a form of entertainment. Why not just abandon all leisure time and work 120 hours a week? A certain amount of leisure time is good for us and watching TV is just one choice for leisure.

BTW, the average household has the TV on 8 hours but the average person watches 3-5 hrs.
By TJR, January 6, 2010 @ 7:35 pm

After a brief interplay, I live without a TV, and I find myself spending far too much time on the net (reading blogs, running a wiki, …). I think that’s slightly better, but very much so. At least I’m not exposed that much to all those annoying ads.

BTW, this points against high opportunity costs in form of lost enterpreneurship.
By abdpbt personal finance, January 6, 2010 @ 8:53 pm

I should have known you would take me to task for 1) citing a piece of research third-hand and 2) using a sociologist as an expert in anything. Touche, Frank.

As far as academics hating TV, there’s kind of a backlash to that these days, at least in my schooling experiences. It’s now impossible to get ahead in most humanities topics without dealing with popular culture in some form, and this has changed the disdain for TV. High/low culture distinctions are more Harold Bloom’s old skool these days.

But you’re right, I didn’t fact check or really employ enough critical thinking in my gimmicky post.
By zach, January 7, 2010 @ 4:49 am

I think this woman should watch Lost and then tell me she hates television.

I do not own a television as a 25yr old transplant to nyc, it just doesn’t make the budget. Besides watching television online for free commercial free is better anyway.

I will give some thought to product placement in my shows, computers are almost always dell and my notebook is a dell.

I would however like to think I had bought it because I could make it the color red which I love and that it was cheap for its performance relative to competitors.
By Rob Bennett, January 7, 2010 @ 9:00 am

It’s hard for me to imagine that watching television would not cost us lots of money. Someone has to pay the salaries of all the people who produce the shows. The payments are made by advertisers. The advertisers obviously are not in this as a charity. Some money must be changing hands.

Yes, television might be cheaper than the movies on a per-hour basis. But most devote more hours to television. So the dollar cost is greater. Also, Netflix lets you obtain movies at a cheaper rate than would apply if you went to a theatre. That strikes me as a better deal than television or in-theatre movies.

Rob
By Andrew Stevens, January 7, 2010 @ 12:15 pm

Thanks for the link, Jim.

Now that I have access to the methodology of the study, I can give it a cursory critique. Her data was compiled using a survey of 80,000 employees of the a Southeastern telecommunications company, which means we already have an unrepresentative sample. In fact, it was a targeted survey and they received 834 usable replies, a 42% response rate. (So more than half self-selected out of the sample as well.) She then did an ordinary least squares regression, controlling for income, permanent income, net worth, sex, race, age, age squared, number of dependents, income-satisfaction, education, and occupation. I have some problems with the social scientist’s insistence on using ordinary least squares for everything, no matter how appropriate it is, but we’ll leave that aside. The next severe problem comes with the fact that she wasn’t testing savings at all, but anticipated savings. The survey asked questions about how much they anticipated saving and borrowing and calculated saving from that. So in fact all she demonstrated was that in this unrepresentative sample, the more television you watched, the less savings you planned to make. So it could be that the more television you watch (or perhaps the more television you’ll admit to watching), the more realistic you tend to be in your estimations. Given Ms. Schor’s hatred of television and her own lack of realism with regards to this study, I’m beginning to buy that theory. This has some additional support since the study reports that those people who reported a high pressure to keep up with the Joneses had their anticipated savings unaffected by television watching. It was only the people who did not report such pressure who were affected by television watching. On the bright side, the television watching results were statistically significant (98%).
By Jim, January 7, 2010 @ 2:23 pm

“The payments are made by advertisers. The advertisers obviously are not in this as a charity. Some money must be changing hands.”

Yes theres lots of money. Over $50B is spent in 2008 on TV advertising in the USA.

Ads pay for TV and ads do influence us to some degree for sure. Sometimes people run out and buy something they wouldn’t have bought simply cause its on TV. But ads don’t necessarily make us spend more than we would have otherwise. Many ads just steer us to one product versus another. A lot of the money would have been spent anyway. But there are many ads from vendors competing between one another for our money. I think ads are usually more about brand awareness than expecting to incite spontaneous consumption. Plus some ads are just not effective no matter what their marketing dept. claims.
By Jim, January 7, 2010 @ 2:34 pm

Andrew,

“So it could be that the more television you watch (or perhaps the more television you’ll admit to watching), the more realistic you tend to be in your estimations.”

You are probably on to something there.

Basically if I ask someone just 2 questions:
a – do you watch a lot of TV
b – do you save much

THen someone might give the ‘right’ answer to each of those. People aren’t supposed to watch a lot of tv but they are supposed to save.
If someone is trying to give the ‘right’ answer then they will say they watch little TV and save a lot.

The fact that the survey was given IN the work place might also influence people to give answers that are expected. I usually tell my boss what I think he wants to hear too. If my employer gave me a survey that is supposed to be for some academic then I might assume that the employer paid for the survey and wants to know the result.
By Andrew Stevens, January 7, 2010 @ 5:08 pm

Jim, you did succinctly sum up what I was getting at there with the correlation between the two questions.

I think they did the best they could with your last point. They stressed to the employees that their employer would not have access to the results of the survey and I assume they kept that promise. Whether this actually convinced everybody, I couldn’t say. (While I’m sure they didn’t collect names, the survey did include lots of personal information like occupation, salary, age, gender, etc. which would certainly lead anyone to believe that he could be easily identified if the employer did see the survey.)
By Rob Bennett, January 8, 2010 @ 11:28 am

Many ads just steer us to one product versus another. A lot of the money would have been spent anyway.

This is so, Jim.

But the costs of the advertising ultimately has to be paid by the people buying the products and services. We might still buy the same stuff if there were no television but we would pay a far reduced price.

Rob
By Andrew Stevens, January 8, 2010 @ 12:03 pm

Rob, you pay that whether you watch the television or not.

And it’s not necessarily true that advertising raises prices. Price advertising, particularly, facilitates consumer search and can actually save you money (and potentially save everybody money as the low cost competitor gains more market share, forcing competitors to lower prices to compete). I remember a study on eyeglass price advertising restrictions (regulation) which showed that these restrictions led to lower utilization and higher prices. I wouldn’t care to generalize that across the board, but it is not obvious that advertising raises prices.
By Four Pillars, January 8, 2010 @ 2:09 pm

If you are watching tv then you aren’t at the mall or participating in an expensive activity.
By Rob Bennett, January 8, 2010 @ 4:13 pm

Rob, you pay that whether you watch the television or not.

That’s a great comeback, Andrew.

And it’s not necessarily true that advertising raises prices. Price advertising, particularly, facilitates consumer search and can actually save you money

This makes sense. But it is a tiny percentage of television advertising that is price-oriented (the fast-food stuff often is). Most of it is appeal to the emotions to get you to buy stuff you otherwise wouldn’t buy or to buy the more fashionable version of something you would buy.

I like the one about how you have to pay for the advertising whether you watch or not, though. Since you’re paying anyway, it could be said that you might as well watch. Maybe it’s too costly not to watch television — Yikes!

Rob
By Andrew Stevens, January 9, 2010 @ 4:52 pm

I should stress that I’m certainly not arguing that advertising lowers prices generally. It’s just that the assumption that advertising raises prices and costs consumers money is not a 100% clear assumption. It could simply cut into profits and cost the producers money instead. I believe this certainly happens sometimes.

Advertising is a mixed bag economically speaking. It’s good because it gives consumers information about products and prices and enhances efficiency in that way, but it’s bad because the advertising costs themselves are wasteful and advertising can be deceptive or manipulative.
By kitty, January 11, 2010 @ 1:26 pm

Rob – without television there would still be advertising. There is advertising in the movies, on the internet, printed media, radio. So instead of paying for a TV ad, the company would pay for a bunch of people walking around towns carrying flyers, printed brochures. Also, there are good things about TV advertising – it creates jobs. Ad designers, unemployed actors, actors and producers of TV shows that wouldn’t have been shown, TV technicians. Lots of people benefit from TV.

Also, why did Schor specifically looked at TV and not at advertising in general? She could’ve said “advertising increases spending”. But she singled out TV. But there are ways to watch TV without advertising – TIVO, DVRs, simple recording and skipping commercials on replaying. There are even channels that don’t have commercials such as PBS and some cable channels. I’d like Schor to tell me how watching “Great Performances from the Met” on PBS or a classic movie on TCM – no commercials on either channel – causes spending. Hint: ticket to an exactly the same HD broadcast in a movie theater is $22, so it should save money…
By Kathy F, January 11, 2010 @ 6:10 pm

You might spend more money if you are watching a lot of QVC, Home Shopping Network, Infomercials to buy stuff or lots of those commercials with “available only on TV” gadgets that are the greatest things invented since sliced bread.
By Ronnie J, January 13, 2010 @ 1:09 pm

Well, I’ll just speak for myself. I love TV. Watch it all the time. And honestly, I’m tempted only by food commercials. Half the time my boyfriend will call and ask what I want for dinner, and it’ll be the most recent food commercial I saw. We both do that. I also watch QVC and HSN from time to time, but I RARELY buy anything (anymore). Seriously, I watch sports. All kinds. And movies. I love movies. But I have no idea what goes on with most evening viewing because I am engrossed in some game of some sort. And for me, that’s worth it.
By Cool Things To Buy, February 15, 2011 @ 8:18 am

Personally, I’ve thrown out my TV about two years ago and haven’t watched much since. Instead I focused on books and other things and I have found that this has been an excellent investment.

TV is the consumption of time while books are investment into your skills and your future. Which one is better? You decide.
By Jerry Buekowitz, April 21, 2011 @ 4:56 pm

“My guess is that comparatively affluent people with ample free time tend to both watch more TV…..”

This is delusional. TV-watching as a time-use is neither financially rewarding nor a priority time-use of those who are financially rewarded by their choice of activities. Law school displaced my own TV habit and I never has the time or inclination thereafter to revisit it. Furthermore, absolutely none of my more financially successful clients have “free” time to watch TV.

Upshot: the difference between affluent and non-affluent people is, first and foremost, whether or not they habitually waste their time on inane and counterproductive diversions.