To change or not to change? – Status quo bias and happiness

Guy Barokas, Hila Hindy Ling, Arie Sherman and Tal Shavit

Journal of Economic Behavior & Organization, 2024, vol. 224, issue C, 656-671

Abstract: The status-quo bias (SQB) is the tendency to stick with the current situation despite potential dissatisfaction. In this study, we explore the relationship between SQB and subjective well-being (SWB). We hypothesized that higher SQB may lead to less desirable situations (e.g., unsatisfactory marriage, unwanted job), negatively affecting SWB. We developed and examined a novel index for measuring SQB. Surveying 1,423 Israeli working adults, the index showed strong internal consistency and validity, affirming reliability and construct validity. A significant negative correlation between SQB and three SWB measures was found, with SQB explaining more to SWB variations than subjective health, income, and religion combined. Positive life changes over the past three years have moderated this relationship. Moreover, despite including factors like regret, present bias, loss aversion, and optimism—which correlate with SWB and SQB in opposite directions and, therefore, could nullify our findings—the SQB-SWB correlation remained robust. Furthermore, our SQB measure significantly predicted SWB even when controlling for the negative relationship between the affective component of SWB (i.e., emotions) and SQB, which was demonstrated to operate in reverse causality compared to our hypothesis. In other words, SQB was found to mediate between the affective component and the other components of SWB. By providing evidence of the correlation between SQB and SWB, we introduce a robust SQB measurement tool, and underscore SQB's importance when exploring SWB determinants, suggesting that policy interventions encouraging individuals to overcome barriers to change could be advantageous.

Keywords: Status-quo bias; Subjective well-being; Optimism; Emotions; Happiness (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:224:y:2024:i:c:p:656-671

DOI: 10.1016/j.jebo.2024.06.017

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