Reversing the Question: Does Happiness Affect Consumption and Savings Behavior?

55 Pages Posted: 24 Sep 2009

See all articles by Cahit Guven

Cahit Guven

Deakin University - School of Accounting, Economics and Finance

Date Written: August 2009

Abstract

I examine the impact of happiness on consumption and savings behavior using data from the DNB Household Survey from the Netherlands and the German Socio-Economic Panel. Instrumenting individual happiness with regional sunshine, the results suggest that happier people save more, spend less, and have a lower marginal propensity to consume. Happier people take more time for making decisions and have more control over expenditures; they expect a longer life and (accordingly) seem more concerned about the future than the present; they also expect less inflation in the future.

Keywords: happiness, savings, consumption, weather

JEL Classification: D03, D12, Q54

Suggested Citation

Guven, Cahit, Reversing the Question: Does Happiness Affect Consumption and Savings Behavior? (August 2009). SOEPpaper No. 219. Available at SSRN: https://ssrn.com/abstract=1476886 or http://dx.doi.org/10.2139/ssrn.1476886

Cahit Guven (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
223
Abstract Views
1,021
rank
135,186
PlumX Metrics