The Effect of Consumer Confidence and Subjective Well-being on Consumers’ Spending Behavior

Lenka Mynaříková () and Vít Pošta ()
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Lenka Mynaříková: University of Chemistry and Technology in Prague
Vít Pošta: Prague University of Economics and Business

Journal of Happiness Studies, 2023, vol. 24, issue 2, No 2, 429-453

Abstract: Abstract The paper focuses on the role of consumer confidence and selected well-being measures in aggregate consumption and in subsets of aggregate consumption on a broad set of 22 OECD countries. Consumer confidence played a positive and statistically significant role in the development of expenditures especially on durable and semi-durable goods and services. The increase in cognitive, affective and eudaimonic measures of well-being, measured by the Cantril ladder, positive and negative affect and freedom to make life choices variables, had negative impact on total consumption and expenditures on semi-durable goods and services. Possible explanations for these estimates are provided in the paper. Based on the purpose of expenditure, consumer confidence was a significant determinant of all expenditures except for unavoidable spending such as food, health, housing, water, energy, and fuel. The subjective well-being indicators showed a negative impact on expenditures on clothing and footwear, recreation and culture, and restaurants and hotels. Possible explanations for the positive and negative effects of subjective well-being measures on consumption, benefits of including the freedom of choice variable, and directions for future research regarding the introduction of understudied variables are discussed.

Keywords: Consumer behavior; Consumer confidence; Locus of control; Freedom of choice; Subjective well-being; Cognitive appraisal theory (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10902-022-00603-5

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