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Chapter 8: Well-being and Consumption: Towards a Theoretical Approach Based on Human Need Satisfaction
8 Well-being and consumption: towards a theoretical approach based on human needs satisfaction Monica Guillen Royo 1. Introduction In the tradition of neoclassical economics, the study of consumption plays a central role. Yet its analysis has been based on rigid assumptions that limit its explanatory power. The assumptions, related to consumer sovereignty, exogeneity of preferences, rationality and insatiability, although challenged by several economists during the twentieth century, are still at the core of the conventional theory of consumer behaviour. Together they contribute theoretically to the commonly accepted view that consumption increases individual utility or well-being. In the utilitarian tradition, utility has two main meanings: desire fulﬁlment and happiness (Sen 1985), both of which are thought to be related to individual well-being. Therefore, consumption is considered either to fulﬁl consumers’ desires or to contribute to their happiness. Alternative approaches to well-being, such as the subjective well-being (SWB) and objective well-being (OWB) traditions, while rejecting most of the neoclassical assumptions, do not support the direct positive link between consumption and well-being. SWB studies analyse the correlation between income and people’s contentment, claiming that income is not satisfactorily correlated with subjective well-being measures. Consumption is hardly analysed as such, but results on income and SWB are taken as representing the eﬀects of consumption. The best-known ﬁndings are related to the fact that although people in richer nations declare themselves to be on average happier than people in poorer nations (Diener and Biwas-Diener 2002), the causes appear not to be related...
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