The Psychology of Material Well-Being

Abstract

Material well-being is defined in terms of satisfaction with a range economic concerns such as government’s handling of the economy, taxes, the cost of basic necessities, household income, pay and fringe benefits from one’s job, financial security, standard of living, and agreement within the family regarding how money should be spent. Much evidence is available demonstrating the substantial effect of material well-being on a variety of measures of subjective well-being. The literature review uncovered a host of antecedents or predictors of material well-being. These antecedents involve two sets of constructs, namely personal factors and contextual factors. Personal factors include socio-demographics (age, gender, education, income, marital status, family structure, etc.); personality traits (self-esteem, etc.) and personality dynamics (compensation, top-down spillover, etc.); needs and need satisfaction (how wealth serve to satisfy different needs), beliefs and mental associations (images of wealthy people); goals and aspirations (income goals and goal attainment); skills, behavior, and resources (financial capability, financial behavior, and lack of financial resources); and values (materialism), lifestyle (consumption), and habits (compulsive consumption). Contextual factors include social comparison (how evaluations of standard of living are influenced by social comparisons), adaptation (how income expectations are adapted by changing circumstances), and changes in the macro economic environment (changes in the rate of unemployment, inflation, economic growth, etc.).