Each day, individuals face numerous decisions and choose between many consumption alternatives based on their values and preferences to increase their subjective well-being (SWB). Therefore, it is important to understand decision-making processes as they determine to a large extent the level of SWB or satisfaction resulting from decisions. Up to now, the literature has mainly focused on the role of materialistic factors, while a common finding is that increases in income, or consumption, contribute to increases in SWB only up to a certain level (Delhey, 2009; Inglehart and Baker, 2000; Kahneman and Deaton, 2010). Once this level is reached, nonmaterialistic factors become increasingly important. This situation reflects the importance of higher needs in the determination of levels of SWB, once lower needs have been satisfied. A plethora of research findings on consumer behavior obtained in the last few decades, and especially in the areas of behavioral economics and economic psychology, shows the importance of nonmaterialistic factors in individual decision-making processes (see, for example, Altman, 2015; Antonides, 2008), and the evaluation of experienced outcomes. This chapter summarizes these findings and outlines which nonmaterialistic factors are of importance in the decision-making process, which may in turn affect levels of well-being. Although earlier the literature has shown the existence of a number of anomalies in economic behavior, the more recent literature has focused more on the implications for such anomalies for the well-being of consumers and households, which explains the focus of this chapter. The findings can be classified into the following three categories: reference effects, effort reduction, and values and experiences. Studies included in the first category suggest that relative outcomes can be more important for individuals than absolute outcomes. Studies in the second category recognize that much of the implemented innovations have the objective to establish effort reductions and therefore increase well-being. Finally, studies included in the third category suggest that individuals may, at a given point, derive well-being from experiences rather than from the (materialistic) consumption itself. This chapter focuses not only on the individual decision-making process, but also on how nonmaterialistic factors influence this decision-making process within multiperson households. This is of importance, since nonmaterialistic factors can affect the household decision process itself or may lead to a more effective or efficient decision process when choosing between consumption alternatives.
|Title of host publication||The Cambridge Handbook of Psychology and Economic Behaviour|
|Publisher||Cambridge University Press|
|Number of pages||25|
|ISBN (Print)||9781316613900, 9781107161399|
|Publication status||Published - 2018|