Journal of Economic Psychology2014-08-18 6:43 PM

The relationship between objective and subjective wealth is moderated by financial control and mediated by money anxiety

Abstract

Prior research has showed that the subjective perception of objective wealth might be affected by various individual difference variables, such as one’s love of money, level of aspirations,  and  materialistic  inclinations.  This  paper  examines  a  model  of  subjective wealth  that  controls  attitudes  toward  money  and  objective  wealth.  Subjective  wealth has been operationalized as a combination of the assessment of financial situation, the ability to make ends meet and perceived adequacy of income to fulfill needs and wants. Objective wealth has been captured by personal net income as well as household income.

 

Results  show that two dimensions of money attitudes affect the subjective perception of objective wealth. Individuals’ perceived financial control (the ability to budget, monitor, and control their money) serves as a moderator for the relationship between objective and subjective wealth: The relationship between the two is stronger for individuals high in financial control and planning than for those low. Furthermore, money anxiety (worry and indecisiveness regarding moneyrelated issues) is negatively related to objective measures of wealth and  its  subjective  evaluation,  and  partially  mediates  the  objective–subjective  wealth relationship.

 

Full Article

http://dx.doi.org/10.1016/j.joep.2014.04.007

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ABOUT THE AUTHOR

Journal of Economic Psychology

Research in Economic Psychology and Behavioral Economics.The Journal aims to present research that will improve understanding of behavioral, especially socio- psychological, aspects of economic phenomena and processes.

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