The association between experiential and material expenditures and subjective well-being: New evidence from Hungarian survey data |
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Institution: | 1. Spears School of Business, 417A Business Building, Oklahoma State University, Stillwater, OK 74078, United States;2. McDonough School of Business, Georgetown University, Washington, DC 20057, United States |
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Abstract: | In the last decade, a number of studies using experimental designs have stated that spending money on experiences rather than on material goods tends to make people happier. In this research we used a novel survey approach to examine the relationships between experiential and material expenditures and life satisfaction. In two studies based on cross-sectional survey data from nationally representative samples in Hungary, we estimated linear and non-linear models. We found no significant evidence supporting the greater return received when buying experiences. Even in the non-linear models the difference between the marginal utilities was not statistically significant at any expenditure rate, although the marginal utility of experiential purchases appeared to be linear, whereas the marginal utility of material purchases was rather decreasing. Nevertheless, our results suggest that a reallocation of an average person’s expenditures (spending more on experiences and less on material goods) might be associated with a slightly higher well-being. |
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Keywords: | Subjective well-being Consumption Experiential purchase Material purchase Survey data I31 D12 3920 2260 |
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