On subjective well-being and excess strategy to cope with financial-scarcity problem

Abstract

Modern economic theory asserts that consumers experiencing the scarcity problem should try to enlarge their budget. By contrast, relying on the ancient Greeks' perspective, we present a mathematical model demonstrating that higher investment in reducing material desires is positively associated with higher welfare. We present evidence from 999 participants aged 25–65 survey, showing that adopting the ancient Greek strategy for dealing with the gap between material desires and financial means is positively correlated with individuals' subjective well-being, while adopting the modern economics strategy is not. Moreover, we show that the prudent desire management becomes less productive with age.