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The relationship between objective and subjective wealth is moderated by financial control and mediated by money anxiety

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  • Gasiorowska, Agata

Abstract

Prior research has showed that the subjective perception of objective wealth might be affected by various individual difference variables, such as one’s love of money, level of aspirations, and materialistic inclinations. This paper examines a model of subjective wealth that controls attitudes toward money and objective wealth. Subjective wealth has been operationalized as a combination of the assessment of financial situation, the ability to make ends meet and perceived adequacy of income to fulfill needs and wants. Objective wealth has been captured by personal net income as well as household income. Results show that two dimensions of money attitudes affect the subjective perception of objective wealth. Individuals’ perceived financial control (the ability to budget, monitor, and control their money) serves as a moderator for the relationship between objective and subjective wealth: The relationship between the two is stronger for individuals high in financial control and planning than for those low. Furthermore, money anxiety (worry and indecisiveness regarding moneyrelated issues) is negatively related to objective measures of wealth and its subjective evaluation, and partially mediates the objective–subjective wealth relationship.

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  • Gasiorowska, Agata, 2014. "The relationship between objective and subjective wealth is moderated by financial control and mediated by money anxiety," Journal of Economic Psychology, Elsevier, vol. 43(C), pages 64-74.
    • Handle: RePEc:eee:joepsy:v:43:y:2014:i:c:p:64-74
    DOI: 10.1016/j.joep.2014.04.007
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    2. Eesha Sharma & Stephanie Tully & Xiang Wang, 2022. "Scarcity and Intertemporal Choice," Working Papers 22-27, Federal Reserve Bank of Philadelphia.
    3. Matthew Brzozowski & Brenda Spotton Visano, 2020. "“Havin’ Money’s Not Everything, Not Havin’ It Is”: The Importance of Financial Satisfaction for Life Satisfaction in Financially Stressed Households," Journal of Happiness Studies, Springer, vol. 21(2), pages 573-591, February.
    4. Assenza, Tiziana & Cardaci, Alberto & Delli Gatti, Dominico, 2021. "The Leverage Self-Delusion: Perceived Wealth and Cognitive Sophistication," TSE Working Papers 19-1055, Toulouse School of Economics (TSE).
    5. Xiaozi Gao & Kerry Lee & Kannika Permpoonputtana & Adisak Plitponkarnpim, 2023. "Earning Too Little And Worrying Too Much: The Role Of Income And Financial Worries On Parents’ Well-Being In Hong Kong And Bangkok," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 743-756, September.
    6. de Bruijn, Ernst-Jan & Antonides, Gerrit, 2020. "Determinants of financial worry and rumination," Journal of Economic Psychology, Elsevier, vol. 76(C).
    7. Verma, Pranay & Sinha, Neena, 2018. "Integrating perceived economic wellbeing to technology acceptance model: The case of mobile based agricultural extension service," Technological Forecasting and Social Change, Elsevier, vol. 126(C), pages 207-216.
    8. Ewa Genge, 2021. "LC and LC-IRT Models in the Identification of Polish Households with Similar Perception of Financial Position," Sustainability, MDPI, vol. 13(8), pages 1-22, April.
    9. Edi Defrancesco & Maria Angela Perito & Irene Bozzolan & Leonardo Cei & Gianluca Stefani, 2017. "Testing Consumers’ Preferences for Environmental Attributes of Pasta. Insights from an ABR Approach," Sustainability, MDPI, vol. 9(10), pages 1-13, September.
    10. Magdalena Adamus & Matúš Grežo, 2021. "Individual Differences in Behavioural Responses to the Financial Threat Posed by the COVID-19 Pandemic," MUNI ECON Working Papers 2021-09, Masaryk University, revised Feb 2023.

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    More about this item

    Keywords

    Income; Money attitudes; Subjective wealth; Wealth perception;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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