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Money, Social Capital and Materialism. Evidence from Happiness Data

Marcin Piekalkiewicz ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: Are unhappiness, high concern for money and scarcity of social capital different faces of the same phenomenon? Economists tend to treat these variables as distinct correlates of well-being. On the contrary, positive psychologists argue that they all relate to materialism, a system of personal values ascribing great importance in life to extrinsic motivations and low priority to intrinsic motivations. Using data from two European cross-sectional surveys and the German Socio-Economic Panel, I test the hypothesis that material interests, proxied by the effects of individual and reference income on well-being, are associated with low levels of social capital. The results suggest that people with scarce social capital tend to have greater material interests, whereas the negative effect of income comparisons on well-being is eliminated for individuals exhibiting the highest levels of social capital. The implication of such finding is that promoting social capital reduces people's material concerns and has positive impact on their well-being. The results from a country-level analysis additionally show that, since social capital moderates the importance of income for well-being on individual level, the well-being gap between income groups is significantly smaller in countries with higher social capital.

Keywords: subjective well-being; life satisfaction; social capital; materialism; relative income; social comparisons; happiness inequality (search for similar items in EconPapers)
JEL-codes: D31 I31 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hap, nep-hpe and nep-hrm
Date: 2016-03
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Working Paper: Money, Social Capital and Materialism. Evidence from Happiness Data (2016) Downloads
Working Paper: Money, Social Capital and Materialism. Evidence from Happiness Data (2016) Downloads
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Persistent link: http://EconPapers.repec.org/RePEc:usi:wpaper:731

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