The Network for Integrated Behavioural Science  
University of Nottingham
  • Print


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.

Details: Social Psychological and Personality Science. Online April 2019

Authors:   Gordon Brown and John Gathergood 



Posted on Tuesday 10th December 2019

NIBS - Network for Integrated Behavioural Science

Sir Clive Granger Building
School of Economics
The University of Nottingham
University Park
Nottingham NG7 2RD

telephone: +44 (0)115 951 4763
fax: +44 (0)115 951 4159