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Reversing the Question: Does Happiness Affect Consumption and Savings Behavior?

SOEPpapers 219, 52 S.

Cahit Guven


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I examine the impact of happiness on consumption and savings behavior using data from the DNB Household Survey from the Netherlands and the German Socio-Economic Panel. Instrumenting individual happiness with regional sunshine, the results suggest that happier people save more, spend less, and have a lower marginal propensity to consume. Happier people take more time for making decisions and have more control over expenditures; they expect a longer life and (accordingly) seem more concerned about the future than the present; they also expect less inflation in the future.

JEL-Classification: D3;D12;Q54
Keywords: happiness, savings, consumption, weather
Frei zugängliche Version: (econstor)