Reversing the question: Does happiness affect consumption and savings behavior?

Cahit Guven ()

Journal of Economic Psychology, 2012, vol. 33, issue 4, 701-717

Abstract: This paper attempts to answer an interesting but empirically challenging question: Do changes in well-being (life satisfaction or happiness) lead to changes in consumption and savings behavior? The paper uses regional sunshine as an instrument for personal happiness using the Dutch Household Survey from the Netherlands. Sunshine improves happiness significantly. Instrumenting happiness with sunshine, happier people are found to save more, spend less, and have a lower marginal propensity to consume. Happier people take more time for making decisions and have more control over expenditures; they expect a longer life and (accordingly) seem more concerned about the future than the present; they also expect less inflation in the future.

Keywords: 3920; Happiness; Savings; Consumption; Weather; Economic behavior (search for similar items in EconPapers)
JEL-codes: D03 D12 Q54 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (72)

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Related works:
Working Paper: Reversing the Question: Does Happiness Affect Consumption and Savings Behavior? (2009)
Working Paper: Reversing the question. Does happiness affect consumption and savings behavior? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:33:y:2012:i:4:p:701-717

DOI: 10.1016/j.joep.2012.01.002

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