Part 3. Consumer Behavior
Published Online: 15 DEC 2010
Copyright © 2011 John Wiley & Sons, Ltd. All rights reserved.
Wiley International Encyclopedia of Marketing
How to Cite
Ahuvia, A., Scott, C. and Bilgin, E. I. 2010. Consumer Well-Being. Wiley International Encyclopedia of Marketing. 3.
- Published Online: 15 DEC 2010
Early measures of consumer well-being (CWB) equated it with a person's quantity of consumption, such that the level of well-being in a society can be summarized by its gross domestic product (GDP) per capita. In the 1960s, this reliance on GDP came under criticism by the social indicators movement, which argued for a more holistic view of human well-being beyond GDP, by including factors such as health, education, and crime rates in measures of social progress (see Society, Culture, and Global Consumer Culture). This focus on diversifying objective indicators of well-being beyond GDP was further augmented in the 1970s by large-scale survey research on subjective indicators of well-being (SWB), such as happiness and life satisfaction. Our knowledge of subjectively experienced aspects of CWB increased dramatically in the 1990s as the rapidly growing research in positive psychology and behavioral economics brought attention to subjective well-being in all domains of life.
Income is a good proxy of a person's overall consumption level, and hence a commonly used indicator of CWB. Income, and hence consumption, is strongly linked to objective measures of well-being such as health, longevity, and education. But the link between income and subjective indicators of well-being such as happiness is much weaker and more complex (Ahuvia, 2008a, 2008b). At very low income levels where basic human needs are not met, increases in income produce lasting improvements in happiness. And at all income levels, increases in income produce short term increases in happiness. However, at even moderate income levels where basic needs have been met, the relationship between income and long term sustained happiness is extremely weak. In general, studies show that differences in income explain between 2 and 5% of individual differences in SWB, thus leaving upward of 95% of the difference between individuals in SWB to be explained by other factors such as genetics, social relationships, and the way people think about the events in their lives.
Why does increased consumption among the nonpoor fail to produce much lasting happiness? Is the problem that consumption just does not work, or is it that most people are not consuming in the right way? Spending money has been shown to produce the most lasting happiness when the money is spent on (i) charitable donations (Dunn, Aknin, and Norton, 2008), (ii) things which help foster social relationships (Lyubomirsky, 2007), and (iii) experiences as opposed to physical objects (Van Boven and Gilovich, 2003), so long as the experience was purchased with the primary goal of acquiring a life experience. Apparently, watching television is not such an experience, as it is negatively associated with CWB (Frey, Benesch, and Stutzer, 2007). Finally, there is also evidence that a good way to turn money into happiness is not to spend it at all, as savings is a good psychic investment (Headey, Muffels, and Wooden, 2008).
CWB is not only influenced by how much people spend and how they spend it, but also by their general attitudes about consumption. Higher levels of materialism are associated with lower levels of SWB (Ahuvia and Wong, 2002). Furthermore, though close social relationships are strongly linked to SWB, just thinking about money puts people in a frame of mind in which they are less inclined to reach out to others or offer others their help (Vohs, Mead, and Goode, 2006).
Marketing, and in particular advertising, has inspired controversy around its relationship to CWB (Klein, 2002; Schor and Holt, 2000). Advocates for marketing stress its role in researching consumer needs and aligning production to meet those needs (see Marketing's Corporate Responsibility and Stages of Market Development). These advocates also emphasize the role of marketing in generating sales, and from them profits, employment, and the other benefits of a healthy economy. Finally, they argue that advertising increases CWB by providing consumers with needed information, and by enhancing the value consumers receive from products by investing the products with symbolic meanings (e.g., coolness, masculinity, etc.) which consumers find desirable. Critics of marketing, on the other hand, argue that marketing decreases CWB by increasing materialism, creating consumer desires in order to fill them, shifting consumers' priorities away from more rewarding nonconsumer activities, promoting racial and gender stereotypes, and promoting unrealistic norms for physical attractiveness or professional success which lead to disappointment and reduced SWB.
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