Money like a drug to the brain - study

Money works like a drug on the human brain - and even just the thought of earning a higher salary gives us a physical buzz, a study has found.

Scientists have discovered that thinking about cash stimulates the reward centres involved in pleasure and the higher the salary - even if it is just imagined - the greater the pleasure generated in the brain.

This may be no great surprise, but the most intriguing aspect of the research is that the findings hold true even if what we want to buy costs more, for example in times of high inflation, and our actual spending power drops.

The results of the study suggest that the human brain is innately susceptible to the illusion of wealth that money can bring. This is known in economics as "money illusion" - when people get fixated on the nominal value of money rather than on its actual purchasing power.

Some economists have proposed that people behave irrationally when it comes to wages by being happier with higher salary increases in times of high inflation than they are with lower salary rises in times of low inflation.

The study, by Professor Armin Falk, of the University of Bonn, found scientific support for the theory of money illusion being embedded in the human mind, by examining the brain activity of 18 volunteers who took part in a series of tests involving different salary payments and prices.

The volunteers were asked to earn their "salaries" by performing a series of mental tasks on a computer, with varying salary levels and prices of goods.

- INDEPENDENT