Ask Ariely: On Flashy Cars, Playing Parents, and Paying Taxes

April 13, 2013 BY danariely

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.


Dear Dan,

I don’t care about cars, never have. But I’m a sales executive, and people tell me I should own a nice car (BMW, Mercedes, etc.) to enhance my credibility to both my customers and sales team. I can afford either but would rather save the cash and buy a Honda. Does it matter? 


The topic here is signaling. The large and colorful tail of the male peacock tells the female peacock about his strength and virility (if I can run around carrying this large and difficult tail, just imagine how strong I am). In the same way, we humans are concerned with the signals we send the people around us about who we are. Signaling is part of the reason we buy large homes, dress up in designer clothes and buy particular cars. So the answer to your question is yes. The car that you drive communicates something about you to the world. Does it matter? Yes again, because we are constantly reading these signals and making inferences about the senders.

But some questions remain. What kind of signal do you want to send? The BMW signal or the Prius signal? Maybe the signal that you buy American-made? Maybe you want to get a really old car and show people that you take really good care of it (a more subtle signal, but an interesting one). Another question is whether the cost of the signal (the cost of the car) is worth its signaling value. This depends on the nature of the people you deal with, how well they know you, how often you make first impressions, etc.

In the interest of full disclosure, I should say that I drive a minivan—but now that I am thinking about it, maybe I should go and stick a Porsche logo on it.


Dear Dan,

My wife and I are in our late 30s, and we are debating whether or not to have kids. Any advice?


The decision on whether or not to have kids is very complex. It depends on many factors, including your financial situation, your preferences and your relationship with your significant other. So, sadly, I can’t provide any direct answer to your question. Obviously, though, this is one of the most important decisions you will ever make—and given its magnitude, you should spend a substantial amount of time trying to get to the bottom of it.

The question about having kids, like many other questions, is all about what you might get from this experience and what you might have to give up. The problem is that before you have kids, it is hard to estimate both the benefits and the costs. So what should you do? You need to try to simulate the kid-experience in order to have a better understanding of what it means and how it would fit you.

For example, why don’t you move in for a week with some of your friends who have kids and observe them up close? Next, why don’t you offer to take care of some other friends’ kids for a week? Then try to expand this exercise and take care of kids of different age groups (don’t skip very young kids and teenagers). After 10 weeks of this experiment, you should be in a much better position to figure out if this is for you or not.

If this exercise seems too daunting for you, you probably fall into one of two categories: 1) You’re not really interested in an empirical answer to this question. Perhaps you’ve already made up your mind, and you’re not yet ready to admit it. 2) You’re too lazy to put the effort into figuring this out. And if that is the case, you probably should not have kids.


Dear Dan,

I hate tax day. Is there any way to make it more pleasant?


When I first starting filling out the 1040EZ form, I loved tax day. It was a day when I got to think about how much money I made, how much I gave the government (another way to think about it is to think about how much the government takes, but I prefer my framing), and what benefits I got in return from the federal and state governments.

Over the years my taxes have become more complex, and my annoyance with the complexity and ambiguity makes it harder for me to focus on taxes as part of my role and duty as a citizen of this amazing country.

So what can we do to make tax day better? The word mitzva in Hebrew means both a duty and a privilege, and one thing I try to do (not always successfully) is to think about taxes as a mitzva.

I also think that the tax code has to change if we are to experience this day as a day of citizenship and not just annoyance. The tax code needs to be much simpler, and taxes need to be more equitable. Finally, there are some nice experimental results showing that if you ask people to take an active role and vote on where a small part of their taxes goes (education, infrastructure, military, health, etc.), this improves their attitude toward taxes.

Happy mitzva day.

See the original article in the Wall Street Journal here.