Dr. Nutavoot Pongsiri of Bank of Thailand has this nice article on the topic.
He says traditional eco cannot help understand this behavior (Chicago school would disagree). You need help from beh eco and psychology to figure this behavior:
Why do people become shopaholics? We cannot explain this phenomenon using a standard economic framework oriented around efficient allocation and the intersection of the demand and supply curves while ignoring people’s behaviour. Instead, we need to look at behavioural economics and related areas such as behavioural finance and cognitive and emotional factors in understanding the economic decisions of individuals.
People have different ways of dealing with stress and anxiety. Some turn to food, eating their way through a particularly emotional time. However, research released recently by the University of Pittsburgh Medical School, Carnegie Mellon, Harvard and Stanford universities reveals the effect of depression on compulsive shopping. The researchers explain that part of what’s happening when people are depressed is they become sad and self-focused and that may lead them to go shopping and become shopaholics. Just like a drug addict uses drugs, shopaholics use the excessive shopping as a release when things get to be too difficult to handle.
What is the solution?
Behavioural economics seek to explain the phenomena that can lead to becoming a shopaholic. We, therefore, should avoid shopping when feeling bored or depressed otherwise we will end up buying clothes that we never wear or even cut the tags off. In addition, we need to do shopping mindfully with a wide-angle monetary lens. The truth is that it can be hard to rid ourselves of habitual shopping, especially when credit cards are so easily obtainable. If we carry only cash, our payment is tangible. We will actually have to take the time and count how much we are paying at the counter. But using credit cards may add to the temptation to spend more than we can afford as we do not see the full extent of our expenses. In addition, we always need to remind ourselves to shop for ideas and experience not for fun or for comforting our mood. Last, but not least, shopping with someone with bad spending habits will influence our shopping habits. We should go shopping with a friend who often leaves stores empty-handed.