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Money, happiness, and aspirations: An experimental study

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  • McBride, Michael

Abstract

The past decade has witnessed an explosion of interest in the scientific study of happiness. Economists, in particular, find that happiness increases in income but decreases in income aspirations, and this work prompts examination of how aspirations form and adapt over time. This paper presents results from the first experimental study of how multiple factors--past payments, social comparisons, and expectations--influence aspiration formation and reported satisfaction. I find that expectations and social comparisons significantly affect reported satisfaction, and that subjects choose to compare themselves with similar subjects when possible. These findings support an aspirations-based theory of happiness.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 74 (2010)
Issue (Month): 3 (June)
Pages: 262-276

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Handle: RePEc:eee:jeborg:v:74:y:2010:i:3:p:262-276

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Keywords: Satisfaction Happiness Adaptation Experiment;

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References

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Citations

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Cited by:
  1. Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie, 2012. "Does Positional Concern Matter in Poor Societies? Evidence from a Survey Experiment in Rural Ethiopia," World Development, Elsevier, Elsevier, vol. 40(2), pages 428-435.
  2. Subhasish M. Chowdhury & Joo Young Jeon, 2013. "Altruism, Anticipation, and Gender," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS), School of Economics, University of East Anglia, Norwich, UK. 13-06, School of Economics, University of East Anglia, Norwich, UK..
  3. Steven Carter & Michael McBride, 2009. "Experienced Utility versus Decision Utility: Putting the 'S' in Satisfaction," Working Papers 080925, University of California-Irvine, Department of Economics.
  4. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs, Spanish Economic Association, vol. 4(1), pages 35-60, March.
  5. Vendrik, Maarten C.M., 2013. "Adaptation, anticipation and social interaction in happiness: An integrated error-correction approach," Journal of Public Economics, Elsevier, Elsevier, vol. 105(C), pages 131-149.
  6. Gerhard Toews, 2013. "Inflated Expectations and Natural Resource Booms: Evidence from Kazakhstan," OxCarre Working Papers, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford 109, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  7. Astrid Matthey & Nadja Dwenger, 2007. "Don't aim too high: the potential costs of high aspirations," Jena Economic Research Papers 2007-097, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Akay, Alpaslan & Andersson, Lisa & Martinsson, Peter & Medhin, Haileselassie, 2014. "Positional Concerns among the Poor: Does Reference Group Matter? Evidence from Survey Experiments," IZA Discussion Papers 8215, Institute for the Study of Labor (IZA).
  9. Gehring, Kai, 2012. "Benefit or burden? Unraveling the effect of economic freedom on subjective well-being," Working Papers 0531, University of Heidelberg, Department of Economics.
  10. Bert Van Landeghem, 2012. "Panel Conditioning and Self-Reported Satisfaction: Evidence from International Panel Data and Repeated Cross-Sections," SOEPpapers on Multidisciplinary Panel Data Research 484, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Luuk Kempen, 2009. "The ‘Downside’ of Women Empowerment in India: An Experimental Inquiry into the Role of Expectations," Social Indicators Research, Springer, Springer, vol. 94(3), pages 465-482, December.

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