Happy savers and happy spenders: An experimental study comparing US Americans and Germans

Amin Zokaei Ashtiani, Thomas Dudek and Marc Oliver Rieger

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 85, issue C

Abstract: We study the relationship between individuals' subjective wellbeing (SWB) and the way they spend or save their money in an innovative controlled experiment with N = 105 subjects. Our methodological contribution is to choose time as a consumption good. Contrary to other consumption goods in experiments, everybody derives benefits from time, but it cannot be saved and it cannot be used for social comparison. We can therefore simplify the subjects' decisions to a choice between immediate consumption and precautionary saving. We find in general that subjects who self-classify as savers or spenders are happier if they also act accordingly, but we find strong cultural differences between US American and German participants. In a second treatment, we allow for social comparison regarding wealth. We found that this influenced US American subjects more than German subjects. The results suggest that it might be possible to increase saving by enabling social comparison in this domain.

Keywords: Personal finance; Spending behavior; Saving behavior; Economics of happiness; Subjective well-being; Cultural finance (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:85:y:2020:i:c:s2214804319306354

DOI: 10.1016/j.socec.2019.101506

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