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Consumption and Happiness

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  • Haining Wang
  • Zhiming Cheng
  • Russell Smyth

Abstract

We examine the relationship between (relative) consumption and happiness using panel data for China, an important developing country. We find that consumption has a positive effect on happiness. An increase in the average consumption of those of the same age, education and gender at the community level has a positive effect on happiness, consistent with a signalling effect, while an increase in the consumption of the highest spenders in this group engenders a jealousy effect. There is mixed evidence that conspicuous consumption and consumption that increases social connectedness increases happiness, while relative deprivation in visible consumption has strong negative effects on happiness. Our findings add to the literature on the effect of relativities in influencing individual happiness.

Suggested Citation

  • Haining Wang & Zhiming Cheng & Russell Smyth, 2019. "Consumption and Happiness," Journal of Development Studies, Taylor & Francis Journals, vol. 55(1), pages 120-136, January.
    • Handle: RePEc:taf:jdevst:v:55:y:2019:i:1:p:120-136
    DOI: 10.1080/00220388.2017.1371294
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    Cited by:

    1. Zhongkun Zhu & Wanglin Ma & Chenxin Leng & Peng Nie, 2021. "The Relationship Between Happiness and Consumption Expenditure: Evidence from Rural China," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(4), pages 1587-1611, August.
    2. Li, Yu & Liu, Kai & Lu, Xiaoying & Wang, Ben Zhe & Zhou, Xuan, 2022. "Welfare housing and household consumption in urban China," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 326-334.
    3. Purohit, Sonal & Radia, Karan Nilesh, 2022. "Conceptualizing masstige buying behavior: A mixed-method approach," Journal of Business Research, Elsevier, vol. 142(C), pages 886-898.
    4. Miha Dominko & Miroslav Verbič, 2022. "The effect of subjective well‐being on consumption behavior," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 876-898, June.
    5. Mingzhi Hu & Guocheng Xiang & Shihu Zhong, 2021. "The Burden of Social Connectedness: Do Escalating Gift Expenditures Make You Happy?," Journal of Happiness Studies, Springer, vol. 22(8), pages 3479-3497, December.
    6. Massimiliano Tani & Zhiming Cheng & Matloob Piracha & Ben Zhe Wang, 2022. "Ageing, Health, Loneliness and Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(2), pages 791-807, April.
    7. Boisvert, Jean & Christodoulides, George & Sajid Khan, M., 2023. "Toward a better understanding of key determinants and consequences of masstige consumption," Journal of Business Research, Elsevier, vol. 161(C).
    8. Selvanathan, Saroja & Selvanathan, E.A. & Jayasinghe, Maneka, 2021. "A new approach to analyse conditional demand: An application to Australian energy consumption," Energy Economics, Elsevier, vol. 93(C).
    9. Cheng, Zhiming, 2021. "Education and consumption: Evidence from migrants in Chinese cities," Journal of Business Research, Elsevier, vol. 127(C), pages 206-215.
    10. Choung, Youngjoo & Pak, Tae-Young & Chatterjee, Swarn, 2021. "Consumption and Life Satisfaction: The Korean Evidence," MPRA Paper 115765, University Library of Munich, Germany.
    11. Biswajit Banerjee & Peter Toth, 2023. "Life Satisfaction and Inequality in Slovakia: The Role of Income, Consumption and Wealth," Working Papers 106, Ashoka University, Department of Economics.
    12. Kumar, Ajay & Paul, Justin & StarÄ ević, SlaÄ‘ana, 2021. "Do brands make consumers happy?- A masstige theory perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    13. Antonio Moreno-Ortiz & Chantal Pérez-Hernández & María García-Gámez, 2022. "The language of happiness in self-reported descriptions of happy moments: Words, concepts, and entities," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-13, December.
    14. Greyling, Talita & Rossouw, Stephanie & Adhikari, Tamanna, 2020. "Happiness-lost: Did Governments make the right decisions to combat Covid-19?," GLO Discussion Paper Series 556, Global Labor Organization (GLO).

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