Economic Mobility, Materialistic Pursuit and Well-Being
Many people's desire to achieve economic success is often driven by their materialistic longings. This is consistent with a fact that the majority of Americans have a value system called materialism that emphasizes the importance of material possessions and acquisition in their lives. Although materialistic people tend to work harder and have higher incomes than nonmaterialistic people, empirical evidence shows that materialistic people experience lower well-being.
It has been shown that materialistic people's propensity to impulsively spend is one of crucial factors contributing to their unhappiness. This is not surprising given that impulsive spending leads to a host of adverse personal and socioeconomic consequences including, but not limited to, guilt and remorse, unmanageable debt and a low savings rate, all of which decrease well-being. Unfortunately, impulsive spending is pervasive as evidenced by a recent survey showing that about 75% of American adults have made impulse purchases.
The reason why materialistic people make impulse purchases is that they hold an active short-term oriented goal to seek pleasure through material acquisition. This is consistent with research findings that materialistic people tend to splurge and have trouble controlling their urge to spend. These people also use shopping as a therapy. In other words, materialistic people focus on achieving instant gratification only to experience its negative consequences.
Is there a way to mitigate this problem? One way would be to nudge materialistic people to focus on long-term goals such as leading a comfortable life. This is important in that people seeking pleasure through material acquisition are easily trapped on a hedonic treadmill and, thus, are unable to improve their financial condition and well-being. People often experience conflicts between short-term and long-term goals, and when confronted with a goal conflict, they are generally inclined to pursue the short-term goal unless they have a good reason to give it up. One reason why people show this tendency is that they are not sure whether long-terms goals can be achieved. Therefore, if materialistic people view their long-term goals as relatively attainable, they will likely self-regulate to pursue long-term, rather than short-term, goals.
Research conducted by me and a co-author, Dr. Yoon of the University at Buffalo, shows that perceived, rather than objectively measured, economic mobility, plays a key role in encouraging materialistic people to give up on short-term goals such as impulsive spending. We conceptualize perceived economic mobility as a personal belief about the degree to which a society allows its members to move up the economic ladder in relative standing. In particular, perceived economic mobility focuses on people’s belief about future economic outcomes contingent upon the necessary steps to achieve upward mobility. People with high perceived economic mobility are likely to believe that long-term economic success can be attained if they pursue it, while people with low perceived economic mobility may believe that it is hard to change their current economic status. In essence, because one’s perception about economic mobility is significantly affected by his or her religious orientation, political attitude, personal experiences, and a host of other idiosyncratic processes, individual perceptions of economic mobility vary widely within a single society, leading to different behavioral patterns. The upshot is that, according to our empirical evidence, materialistic people perceiving high economic mobility spend significantly less impulsively than those perceiving low economic mobility. Put differently, perceived economic mobility moderates the linkage between materialism and impulsive spending. This finding holds whether the perception of economic mobility is measured or manipulated.
Our research highlights two important points. First, the key is that it is subjectively perceived economic mobility that matters. Although actual economic mobility can be measured at a macro level, an individual's subjective assessment of economic realties affects his or her decision-making. Second, due to its nature, the perception of economic mobility can be influenced by external intervention. For example, reading an article describing a success story of achieving the American dream can lead to a higher level of perceived economic mobility. This is a double-edged sword. On one hand, when targeting materialistic consumers, profit-seeking firms might be able to increase sales by making economic mobility less salient in promotional messages. However, increased impulsive spending will undoubtedly undermine personal and national well-being. On the other hand, an important public policy implication would be that public campaigns aimed at increasing perceived economic mobility are likely to curb materialistic people's impulsive spending. This is more important for economically distressed people who hold a materialistic value.
Great economic freedom and mobility are a hallmark of modern society. They facilitate gaining more financial resources that can lead to materialistic possessions and their acquisition, especially among materialistic people. However, this does not necessarily increase well-being and oftentimes decreases it as evidenced by decades of research. Understanding the nature and the role of the perception of economic mobility appears to provide insight into the ironic relationship between materialistic pursuit and well-being. Since we do not currently know various factors that might shape the perception of economic mobility as well as their relative importance, future research is needed to shed more light on this increasingly crucial area.