Rising income inequality is taking a toll on the subjective wellbeing (SWB) of people worldwide. Prior research that examines how consumption bears on the relationship between income inequality and SWB has found that people facing high income inequality tend to increase material acquisition. This response often fails to improve SWB, however, and instead can further undermine SWB if people overspend and accumulate debt. Prior research therefore leaves open important questions about whether there is a role for consumption and material possessions in maintaining SWB under high income inequality and, specifically, what that role might be. In my thesis, I examine whether certain possessions – specifically, favorite possessions – might help consumers cope with income inequality. The k...[ Read more ]

Rising income inequality is taking a toll on the subjective wellbeing (SWB) of people worldwide. Prior research that examines how consumption bears on the relationship between income inequality and SWB has found that people facing high income inequality tend to increase material acquisition. This response often fails to improve SWB, however, and instead can further undermine SWB if people overspend and accumulate debt. Prior research therefore leaves open important questions about whether there is a role for consumption and material possessions in maintaining SWB under high income inequality and, specifically, what that role might be. In my thesis, I examine whether certain possessions – specifically, favorite possessions – might help consumers cope with income inequality. The key finding is that the negative effect of income inequality on SWB is offset among consumers who focus their attention on their favorite possessions. I argue and show that favorite possessions have this buffering effect because their value is idiosyncratic and incommensurable with the value of other possessions. The incommensurability of a favorite possession is important because a key reason why income inequality undermines SWB is that it makes people feel deprived relative to others. However, I find that focusing on favorite possessions minimizes consumers’ tendencies to compare themselves to others, and hence, minimizes the effect of income inequality on relative deprivation and SWB. Data collected across ten countries show that the negative effect of income inequality on SWB is mitigated when consumers attend to their favorite possessions. A longitudinal intervention that trains consumers to focus on their favorite things yields benefits that persist after a delay. Moreover, focusing on favorite possessions buffers SWB among those who perceive income inequality to be high, as well as those who live in countries with high objective income inequality. The beneficial effect of a favorite possession under income inequality is analogous to that of an experiential purchase – which has been shown to generate greater SWB than a material purchase, in general – suggesting that favorite possessions share characteristics of experiential purchases. Findings of this thesis have implications for consumer wellbeing: consumers facing high income inequality can in fact derive happiness from material possessions, and not necessarily by purchasing new goods or focusing on their accumulated wealth. Rather, happiness can come from focusing on a few favorite things even when contextual factors (here, income inequality) tend to make people feel deprived relative to others.