Consumption changes, not income changes, predict changes in subjective well-being

Brown, Gordon D. A.; Gathergood, John

Abstract

Does happiness depend on what one earns or what one spends? Income is typically found to have small beneficial effects on well-being. However, economic theory suggests that well-being is conferred not by income but by consumption (i.e., spending on goods and services), and a person’s level of consumption may differ greatly from their level of income due to saving behavior and taxation. Moreover, research within consumer psychology has established relationships between people’s spending in specific categories and their well-being. Here we show for the first time using panel data that changes in life satisfaction are associated with changes in consumption, not changes in income. We also find some evidence that increased conspicuous consumption is more strongly associated with improved well-being than is increased nonconspicuous consumption.

Citation

Brown, G. D. A., & Gathergood, J. (2019). Consumption changes, not income changes, predict changes in subjective well-being. Social Psychological and Personality Science, https://doi.org/10.1177/1948550619835215

• Journal Article Type: Article
• Acceptance Date: Jan 16, 2019
• Online Publication Date: Apr 8, 2019
• Publication Date: Apr 8, 2019
• Deposit Date: Apr 12, 2019
• Publicly Available Date: Apr 12, 2019
• Journal: Social Psychological and Personality Science
• Print ISSN: 1948-5506
• Electronic ISSN: 1948-5514
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1177/1948550619835215
• Keywords: Income, Consumption, Conspicuous consumption, Well-being, Life satisfaction
• Public URL: https://nottingham-repository.worktribe.com/output/1782147
• Publisher URL: https://journals.sagepub.com/doi/10.1177/1948550619835215
• Additional Information: Copyright © 2019 by Social and Personality Psychology Consortium