IDEAS home Printed from https://ideas.repec.org/a/spr/inrvec/v62y2015i2p163-182.html
   My bibliography  Save this article

Consumption and life satisfaction at different levels of economic development

Author

Listed:
  • Devrim Dumludag

Abstract

The present paper proposes to examine the impact of varying consumption categories on life satisfaction at different levels of development by focusing on transition countries and developed European countries. This is done by looking at the Life in Transition Surveys (I and II) that include reported life satisfaction, as well as control variables such as gender, household size, marital status, age, and education (EBRD, http://www.ebrd.com/pages/research/publications/special/lifeint ransition.shtml 2007 ; http://www.ebrd.com/pages/research/publications/special/transit ionII.shtml 2011 ). The study includes several categories such as expenditures on food, education, and durables. The paper also examines the impact of the reduction in several consumption items on life satisfaction after the 2008 crisis. The econometric results reveal that not all consumption items are statistically significant as determinants of life satisfaction. At different levels of development, the relationship between life satisfaction and consumption differs and some consumption categories have a negative impact on life satisfaction. Finally, the reduction in the level of consumption due to economic crises has a negative impact on life satisfaction. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Devrim Dumludag, 2015. "Consumption and life satisfaction at different levels of economic development," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(2), pages 163-182, June.
    • Handle: RePEc:spr:inrvec:v:62:y:2015:i:2:p:163-182
    DOI: 10.1007/s12232-015-0226-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s12232-015-0226-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s12232-015-0226-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Martin Browning & Thomas F. Crossley & Guglielmo Weber, 2003. "Asking consumption questions in general purpose surveys," Economic Journal, Royal Economic Society, vol. 113(491), pages 540-567, November.
    2. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    3. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    4. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 89-109, May.
    5. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    6. Ruut Veenhoven, 1991. "Is happiness relative?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 24(1), pages 1-34, February.
    7. Richard Easterlin, 2005. "Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Veenhoven," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(3), pages 429-443, December.
    8. Ruut Veenhoven, 1988. "The utility of happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 20(4), pages 333-354, August.
    9. Charles Kenny, 2005. "Does Development Make You Happy? Subjective Wellbeing And Economic Growth In Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 73(2), pages 199-219, September.
    10. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    11. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    12. Layard, Richard, 1980. "Human Satisfactions and Public Policy," Economic Journal, Royal Economic Society, vol. 90(363), pages 737-750, December.
    13. Charles Kenny, 1999. "Does Growth Cause Happiness, or Does Happiness Cause Growth?," Kyklos, Wiley Blackwell, vol. 52(1), pages 3-25, February.
    14. Bruce Headey & Ruud Muffels & Mark Wooden, 2008. "Money Does not Buy Happiness: Or Does It? A Reassessment Based on the Combined Effects of Wealth, Income and Consumption," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 87(1), pages 65-82, May.
    15. Thomas DeLeire & Ariel Kalil, 2010. "Does consumption buy happiness? Evidence from the United States," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(2), pages 163-176, June.
    16. Monica Guillen-Royo, 2008. "Consumption and Subjective Wellbeing: Exploring Basic Needs, Social Comparison, Social Integration and Hedonism in Peru," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 89(3), pages 535-555, December.
    17. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    18. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
    19. Liselot Hudders & Mario Pandelaere, 2012. "The Silver Lining of Materialism: The Impact of Luxury Consumption on Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 13(3), pages 411-437, June.
    20. Ed Diener & Ed Sandvik & Larry Seidlitz & Marissa Diener, 1993. "The relationship between income and subjective well-being: Relative or absolute?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 28(3), pages 195-223, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Yunwei & Ning, Xiao & Wang, Zijie & Cheng, Jingyu & Li, Fumeng & Hao, Yu, 2022. "Would energy poverty affect the wellbeing of senior citizens? Evidence from China," Ecological Economics, Elsevier, vol. 200(C).
    2. Tetsuya Tsurumi & Rintaro Yamaguchi & Kazuki Kagohashi & Shunsuke Managi, 2021. "Are Cognitive, Affective, and Eudaimonic Dimensions of Subjective Well-Being Differently Related to Consumption? Evidence from Japan," Journal of Happiness Studies, Springer, vol. 22(6), pages 2499-2522, August.
    3. Nie, Peng & Li, Qiaoge & Sousa-Poza, Alfonso, 2021. "Energy poverty and subjective well-being in China: New evidence from the China Family Panel Studies," Energy Economics, Elsevier, vol. 103(C).
    4. Qian Li & Xiaoguang Huang & Hanwen Zhang, 2023. "Exploring the Effects of Consumption Expenditures on Life Satisfaction in China," Journal of Happiness Studies, Springer, vol. 24(6), pages 1963-1990, August.
    5. Tetsuya Tsurumi & Rintaro Yamaguchi & Kazuki Kagohashi & Shunsuke Managi, 2020. "Attachment to Material Goods and Subjective Well-Being: Evidence from Life Satisfaction in Rural Areas in Vietnam," Sustainability, MDPI, vol. 12(23), pages 1-20, November.
    6. Salvatore Bimonte & Luigi Bosco & Arsenio Stabile, 2020. "Integration and Subjective Well-Being Among Off-Site University Students," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(3), pages 947-969, February.
    7. Luca Stanca & Ruut Veenhoven, 2015. "Consumption and happiness: an introduction," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(2), pages 91-99, June.
    8. Lenka Mynaříková & Vít Pošta, 2023. "The Effect of Consumer Confidence and Subjective Well-being on Consumers’ Spending Behavior," Journal of Happiness Studies, Springer, vol. 24(2), pages 429-453, February.
    9. Kenneth Owusu Ansah & Nutifafa Eugene Yaw Dey & Abigail Esinam Adade & Pascal Agbadi, 2022. "Determinants of life satisfaction among Ghanaians aged 15 to 49 years: A further analysis of the 2017/2018 Multiple Cluster Indicator Survey," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-18, January.
    10. Fengyu Wu, 2020. "An Examination of the Effects of Consumption Expenditures on Life Satisfaction in Australia," Journal of Happiness Studies, Springer, vol. 21(8), pages 2735-2771, December.
    11. Chenhong Peng, 2023. "Household Consumption and the Discrepancy Between Economic and Subjective Poverty: The Mediating Roles of Perceived Social Status and Social Connectedness," Journal of Happiness Studies, Springer, vol. 24(5), pages 1703-1727, June.
    12. Choung, Youngjoo & Pak, Tae-Young & Chatterjee, Swarn, 2021. "Consumption and Life Satisfaction: The Korean Evidence," MPRA Paper 115765, University Library of Munich, Germany.
    13. Ruut Veenhoven & Felicia Chiperi & Xin Kang & Martijn Burger, 2021. "Happiness and Consumption: A Research Synthesis Using an Online Finding Archive* â€," SAGE Open, , vol. 11(1), pages 21582440209, March.
    14. Chenhong Peng & Yik-Wa Law, 2023. "How Do Consumption Patterns Influence the Discrepancy Between Economic and Subjective Poverty?," Journal of Happiness Studies, Springer, vol. 24(4), pages 1579-1604, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fengyu Wu, 2020. "An Examination of the Effects of Consumption Expenditures on Life Satisfaction in Australia," Journal of Happiness Studies, Springer, vol. 21(8), pages 2735-2771, December.
    2. Drakopoulos, Stavros, 2011. "Hierarchical Needs, Income Comparisons and Happiness Levels," MPRA Paper 48343, University Library of Munich, Germany.
    3. David G. Blanchflower & Andrew J. Oswald, 2004. "Money, Sex and Happiness: An Empirical Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 393-415, October.
    4. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    5. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
    6. Konow, James & Earley, Joseph, 2008. "The Hedonistic Paradox: Is homo economicus happier," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 1-33, February.
    7. Stavros Drakopoulos, 2008. "The paradox of happiness: towards an alternative explanation," Journal of Happiness Studies, Springer, vol. 9(2), pages 303-315, June.
    8. Devrim Dumludag, 2013. "Life Satisfaction and Income Comparison Effects in Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 1199-1210, December.
    9. Vendrik, Maarten C.M. & Woltjer, Geert B., 2007. "Happiness and loss aversion: Is utility concave or convex in relative income?," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1423-1448, August.
    10. Devrim Dumludag, 2014. "Satisfaction and comparison income in transition and developed economies," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(2), pages 127-152, June.
    11. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    12. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    13. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 89-109, May.
    14. Powdthavee, Nattavudh & Lekfuangfu, Warn N. & Wooden, Mark, 2015. "What's the good of education on our overall quality of life? A simultaneous equation model of education and life satisfaction for Australia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 54(C), pages 10-21.
    15. Michela Ponzo, 2011. "Occupational Status and Individual Subjective Well-Being in Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, September.
    16. Alexandru Cojocaru, 2016. "Does Relative Deprivation Matter in Developing Countries: Evidence from Six Transition Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(3), pages 735-756, February.
    17. Ozge Gokdemir, 2015. "Consumption, savings and life satisfaction: the Turkish case," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(2), pages 183-196, June.
    18. Claudia Senik, 2005. "Income distribution and well‐being: what can we learn from subjective data?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 43-63, February.
    19. Vendrik, Maarten C.M. & Woltjer, Geert, 2006. "Happiness and Loss Aversion: When Social Participation Dominates Comparison," IZA Discussion Papers 2218, Institute of Labor Economics (IZA).
    20. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.

    More about this item

    Keywords

    Life satisfaction; Transition countries; Developed countries; Consumption; D11; D6; I31; O1;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D6 - Microeconomics - - Welfare Economics
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:inrvec:v:62:y:2015:i:2:p:163-182. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.