IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i4p2535-2547.html

On subjective well‐being and excess strategy to cope with financial‐scarcity problem

Author

Listed:
  • Arie Sherman
  • Hila Axelrad
  • Guy Barokas

Abstract

Modern economic theory asserts that consumers experiencing the scarcity problem should try to enlarge their budget. By contrast, relying on the ancient Greeks' perspective, we present a mathematical model demonstrating that higher investment in reducing material desires is positively associated with higher welfare. We present evidence from 999 participants aged 25–65 survey, showing that adopting the ancient Greek strategy for dealing with the gap between material desires and financial means is positively correlated with individuals' subjective well‐being, while adopting the modern economics strategy is not. Moreover, we show that the prudent desire management becomes less productive with age.

Suggested Citation

  • Arie Sherman & Hila Axelrad & Guy Barokas, 2024. "On subjective well‐being and excess strategy to cope with financial‐scarcity problem," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2535-2547, June.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2535-2547
    DOI: 10.1002/mde.4160
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4160
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4160?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
    ---><---

    References listed on IDEAS

    as
    1. Edward Castronova, 2023. "Preference evolution, attention, and happiness," Kyklos, Wiley Blackwell, vol. 76(2), pages 301-315, May.
    2. Daoud, Adel, 2018. "Unifying Studies of Scarcity, Abundance, and Sufficiency," Ecological Economics, Elsevier, vol. 147(C), pages 208-217.
    3. James J. Choi, 2022. "Popular Personal Financial Advice versus the Professors," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 167-192, Fall.
    4. David G. Blanchflower & Andrew J. Oswald, 2019. "Unhappiness and Pain in Modern America: A Review Essay, and Further Evidence, on Carol Graham's Happiness for All?," Journal of Economic Literature, American Economic Association, vol. 57(2), pages 385-402, June.
    5. Gülen Sarial‑Abi & Aulona Ulqinaku & Giampaolo Viglia & Gopal Das, 2023. "The effect of financial scarcity on discretionary spending, borrowing, and investing," Journal of the Academy of Marketing Science, Springer, vol. 51(6), pages 1214-1243, November.
    6. Daniel Kahneman & Richard H. Thaler, 2006. "Anomalies: Utility Maximization and Experienced Utility," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 221-234, Winter.
    7. Arie Sherman & Tal Shavit, 2018. "The Thrill of Creative Effort at Work: An Empirical Study on Work, Creative Effort and Well-Being," Journal of Happiness Studies, Springer, vol. 19(7), pages 2049-2069, October.
    8. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    9. Linying (Sophie) Fan & Xueni (Shirley) Li & Yuwei Jiang & Gita V JoharEditor & Amna KirmaniEditor & Rajesh BagchiAssociate Editor, 2019. "Room for Opportunity: Resource Scarcity Increases Attractiveness of Range Marketing Offers," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 46(1), pages 82-98.
    10. Gülen Sarial-Abi & Aulona Ulqinaku & Giampaolo Viglia & Gopal Das, 2023. "Correction to: The effect of financial scarcity on discretionary spending, borrowing, and investing," Journal of the Academy of Marketing Science, Springer, vol. 51(6), pages 1244-1244, November.
    11. Ed Diener & Robert Biswas-Diener, 2002. "Will Money Increase Subjective Well-Being?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 119-169, February.
    12. Fuzhong Chen & Guohai Jiang & Mengyi Gu, 2021. "Household savings and subjective wellbeing: Evidence from China," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(4), pages 1489-1504, December.
    13. Kelly Goldsmith & Vladas Griskevicius & Rebecca Hamilton, 2020. "Scarcity and Consumer Decision Making: Is Scarcity a Mindset, a Threat, a Reference Point, or a Journey?," Journal of the Association for Consumer Research, University of Chicago Press, vol. 5(4), pages 358-364.
    14. Eesha Sharma & Adam L. Alter, 2012. "Financial Deprivation Prompts Consumers to Seek Scarce Goods," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(3), pages 545-560.
    15. Philip M. Fernbach & Christina Kan & John G. Lynch Jr., 2015. "Squeezed: Coping with Constraint through Efficiency and Prioritization," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 41(5), pages 1204-1227.
    16. Stephanie M. Tully & Hal E. Hershfield & Tom Meyvis, 2015. "Seeking Lasting Enjoyment with Limited Money: Financial Constraints Increase Preference for Material Goods over Experiences," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 42(1), pages 59-75.
    17. Schwandt, Hannes, 2016. "Unmet aspirations as an explanation for the age U-shape in wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 122(C), pages 75-87.
    18. John Maynard Keynes, 2010. "Essays in Persuasion," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-59072-8, March.
    19. Leonardo Becchetti & Fabio Pisani & Berkan Acar, 2023. "Eudaimonic wellbeing and life expectancy," Kyklos, Wiley Blackwell, vol. 76(2), pages 179-195, May.
    20. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    21. Arie Sherman & Tal Shavit & Guy Barokas & Nonna Kushnirovich, 2021. "On the Role of Personal Values and Philosophy of Life in Happiness Technology," Journal of Happiness Studies, Springer, vol. 22(3), pages 1055-1070, March.
    22. Dotan Leshem, 2016. "Retrospectives: What Did the Ancient Greeks Mean by Oikonomia?," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 225-238, Winter.
    Full references (including those not matched with items on IDEAS)

    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. Gülen Sarial‑Abi & Aulona Ulqinaku & Giampaolo Viglia & Gopal Das, 2023. "The effect of financial scarcity on discretionary spending, borrowing, and investing," Journal of the Academy of Marketing Science, Springer, vol. 51(6), pages 1214-1243, November.
    2. Aulona Ulqinaku & Gülen Sarial-Abi, 2025. "When sales promotions make consumers experiencing financial restrictions purchase more or less: the role of decisional conflict," Italian Journal of Marketing, Springer, vol. 2025(2), pages 155-179, June.
    3. Eyal Lahav & Arie Sherman & Tal Shavit, 2025. "The Longitudinal Effect of Pre-war Investments in Hedonic Capital on Wartime Well-Being," Journal of Happiness Studies, Springer, vol. 26(1), pages 1-23, January.
    4. Ma, Yuan & Wang, Haiying, 2025. "The interaction effect of green advertising appeal and monetary resource perception on consumers’ green purchase intention," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 118(C).
    5. Marcus Klemm, 2022. "Well-being Changes from Year to Year: A Comparison of Current, Remembered and Predicted Life Satisfaction," Journal of Happiness Studies, Springer, vol. 23(4), pages 1669-1681, April.
    6. O'Connor, Kelsey J. & Graham, Carol, 2019. "Longer, more optimistic, lives: Historic optimism and life expectancy in the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 374-392.
    7. Arie Sherman & Pninit Russo-Netzer & Tal Shavit, 2025. "Hedonic and Eudaimonic Capital as Tools for Managing Fluctuations in Well-Being Throughout the Voyage of Life," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 20(4), pages 1559-1582, August.
    8. Jaikumar, Saravana & Singh, Ramendra & Sarin, Ankur, 2018. "‘I show off, so I am well off’: Subjective economic well-being and conspicuous consumption in an emerging economy," Journal of Business Research, Elsevier, vol. 86(C), pages 386-393.
    9. Bahadır Ayar & Huriye Şebnem Burnaz, 2025. "The nexus of scarcity and donation: exploring the interplay of construal of resources, well-being, trust, and efficacy in nonprofit fundraising," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 22(2), pages 373-411, June.
    10. Malika Malika & Durairaj Maheswaran & Shailendra Pratap Jain, 2022. "Perceived financial constraints and normative influence: discretionary purchase decisions across cultures," Journal of the Academy of Marketing Science, Springer, vol. 50(2), pages 252-271, March.
    11. Haowen Xiao & Jiayi Guo & Junyi Fang & Ting Xiao & Guocheng Li, 2023. "Impact of resource scarcity on general categorization tendency: The moderating role of perceived mutability," PLOS ONE, Public Library of Science, vol. 18(8), pages 1-13, August.
    12. Eesha Sharma & Stephanie Tully & Xiang Wang, 2022. "Scarcity and Intertemporal Choice," Working Papers 22-27, Federal Reserve Bank of Philadelphia.
    13. Grimani, Katerina, 2014. "Labor earnings and Psychological well-being: An Empirical Analysis," MPRA Paper 57098, University Library of Munich, Germany.
    14. Phumsith Mahasuweerachai & Siwarut Pangjai, 2018. "Does Piped Water Improve Happiness? A Case from Asian Rural Communities," Journal of Happiness Studies, Springer, vol. 19(5), pages 1329-1346, June.
    15. Lamu, Admassu N. & Olsen, Jan Abel, 2016. "The relative importance of health, income and social relations for subjective well-being: An integrative analysis," Social Science & Medicine, Elsevier, vol. 152(C), pages 176-185.
    16. Shang Ha & Seokho Kim, 2013. "Personality and Subjective Well-Being: Evidence from South Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(1), pages 341-359, March.
    17. 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.
    18. Junji Kageyama & Kazuma Sato, 2021. "Explaining the U-shaped life satisfaction: dissatisfaction as a driver of behavior," Journal of Bioeconomics, Springer, vol. 23(2), pages 179-202, July.
    19. Fu, Tianhui & Wang, Yan & Jiang, Jing & Meng, Lu (Lucia), 2025. "wallet sore, gifts galore: The impact of financial constraints on quantity–quality tradeoffs in gift-giving," Journal of Business Research, Elsevier, vol. 186(C).
    20. Emmerling, Johannes & Qari, Salmai, 2017. "Car ownership and hedonic adaptation," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 29-38.

    More about this item

    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:wly:mgtdec:v:45:y:2024:i:4:p:2535-2547. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.