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A new study has stated that the physical appearance of a currency bill affects a person's spending habits, as he/she is more likely to hold on to new bills.

Just like the look of everything else matters, the physical appearance of money also matters. According to researchers from Guelph's Department of Marketing and Consumer Studies, it has been seen that people tend to hold on to new bills, while they prefer spending old and dirty bills.

"Basically, the physical appearance of money matters more than traditionally thought," said Theodore Noseworthy, a professor in Guelph's Department of Marketing and Consumer Studies, who conducted the research with Fabrizio Di Muro of the University of Winnipeg.

This discovery may seem very trivial, but is actually very significant according to the professor, as it does away with the common belief that man only perceives the nominal value of money.

"We tend to regard currency as a means to consumption and not a product itself. In other words, it should not matter if it's dirty or worn because it has the same value regardless," he said.

"But what we show is that money is indeed a vehicle for social utility, and that it's actually subject to the same inferences and biases as the products it can buy."

The research was conducted across five different studies, where a group of voluntary participants were given some money consisting of both new and old bills, and were asked to spend it. It was found that all of them held on to the new bills while they spent the old bills without a second thought.

"It's the 'ick' factor," Noseworthy said. "The idea of touching something that others also handled: people want to rid themselves of worn currency, because they are disgusted by the contamination from others.

Noseworthy noted that people value new bills more, as they take pride in spending it when others are around. During such a scenario, people are more likely to pay with new bills, even if it included paying four new $5 bills rather than a crumpled $20 bill.

"It turns out money itself can be part of conspicuous consumption," Noseworthy said.