The Relationship between Decision-Making Heuristics and Perceived Quality of Life

Nahid Unkic () and Jasmina Okicic ()
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Nahid Unkic: University of Tuzla, Bosnia and Herzegovina
Jasmina Okicic: University of Tuzla, Bosnia and Herzegovina

Eurasian Journal of Business and Management, 2021, vol. 9, issue 2, 90-99

Abstract: The purpose of this research is to provide some insights into relationship between decision-making heuristics and perceived quality of life. Using the purposive sampling technique, data collection was carried out, in Bosnia and Herzegovina, from June to October 2020, yielding a sample of 319 valid responses. To gain a better understanding of the relationship between decision-making heuristics and the perceived quality of life, we, primarily, use descriptive statistical analysis, chi-square test and probit regression model. The research findings have revealed positive association between all three decision-making heuristics, i.e. representativeness, anchoring, availability, and perceived quality of life. Furthermore, the group with above-average perceived quality of life have higher representativeness, anchoring, and availability scores comparing to the group with below-average perceived quality of life. These differences are statistically significant. Furthermore, out of three decision-making heuristics components, availability, or a heuristic whereby people make judgments about the likelihood of an event based on how easily a similar example comes to mind, seems to be the strongest predictor of the perceived quality of life. Memories that are easily recalled are often insufficient for estimating likelihood of occurring similar events again in the future. In that respect, availability may produce low-quality information in the decision making process. Ultimately, this may lead to bad decisions.

Keywords: Heuristics; Perceived Quality of Life; Decision-Making (search for similar items in EconPapers)
Date: 2021
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