Money, Well-Being, and Loss Aversion: Does an Income Loss Have a Greater Effect on Well-Being Than an Equivalent Income Gain?
Christopher J. Boyce
(1, 2)
,
Alex M. Wood
(1)
,
James Banks
(3)
,
Andrew E. Clark
(4, 5)
,
Gordon D. A. Brown
(6)
Andrew E. Clark
- Fonction : Auteur
- PersonId : 742286
- IdHAL : andrew-clark
- ORCID : 0000-0001-7004-7654
- IdRef : 035800070
Résumé
Higher income is associated with greater well-being, but do income gains and losses affect well-being differently? Loss aversion, whereby losses loom larger than gains, is typically examined in relation to decisions about anticipated outcomes. Here, using subjective-well-being data from Germany (N = 28,723) and the United Kingdom (N = 20,570), we found that losses in income have a larger effect on well-being than equivalent income gains and that this effect is not explained by diminishing marginal benefits of income to well-being. Our findings show that loss aversion applies to experienced losses, challenging suggestions that loss aversion is only an affective-forecasting error. By failing to account for loss aversion, longitudinal studies of the relationship between income and well-being may have overestimated the positive effect of income on well-being. Moreover, societal well-being might best be served by small and stable income increases, even if such stability impairs long-term income growth.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Money, Well-Being, and Loss Aversion: Does an Income Loss Have a Greater Effect on Well-Being Than an Equivalent Income Gain?
|
Résumé |
en
Higher income is associated with greater well-being, but do income gains and losses affect well-being differently? Loss aversion, whereby losses loom larger than gains, is typically examined in relation to decisions about anticipated outcomes. Here, using subjective-well-being data from Germany (N = 28,723) and the United Kingdom (N = 20,570), we found that losses in income have a larger effect on well-being than equivalent income gains and that this effect is not explained by diminishing marginal benefits of income to well-being. Our findings show that loss aversion applies to experienced losses, challenging suggestions that loss aversion is only an affective-forecasting error. By failing to account for loss aversion, longitudinal studies of the relationship between income and well-being may have overestimated the positive effect of income on well-being. Moreover, societal well-being might best be served by small and stable income increases, even if such stability impairs long-term income growth.
|
Auteur(s) |
Christopher J. Boyce
1, 2
, Alex M. Wood
1
, James Banks
3
, Andrew E. Clark
4, 5
, Gordon D. A. Brown
6
1
Behavioural Science Centre, Stirling Management School
( 243603 )
- Royaume-Uni
2
School of Psychological Sciences
( 218360 )
- Royaume-Uni
3
Institute for Fiscal Studies
( 243604 )
- Royaume-Uni
4
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
5
PSE -
Paris-Jourdan Sciences Economiques
( 139754 )
- 48 boulevard Jourdan 75014 Paris
- France
6
University of Warwick [Coventry]
( 302824 )
- Coventry CV4 7AL
- Royaume-Uni
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Non spécifiée
|
Date de publication |
2013
|
Volume |
24
|
Numéro |
12
|
Page/Identifiant |
2557-2562
|
Domaine(s) |
|
Financement |
|
Mots-clés |
en
loss aversion, money, income, happiness, subjective well-being
|
DOI | 10.1177/0956797613496436 |
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