Affluence: More Relative Than Absolute

  • Mariano Rojas
Part of the Social Indicators Research Series book series (SINS, volume 76)


Previous studies on the relationship between consumption and subjective well-being do assume that well-being emerges out of the relationship between the person and her consumption bundle, with no role at all for contextual factors such as other people’s consumption.

This chapter studies the importance that contextual factors play in the relationship between subjective well-being and ownership of durable goods. It takes advantage of a large and representative survey implemented in Mexico in 2014 to study the importance of absolute and relative effects in the ownership of durable goods. A relative effect takes place when well-being is attained from the relative standing the goods provide; this is, from having what others do not have. An absolute effect takes place when well-being from consumption is independent of what other people have. The distinction between relative and absolute effects matters because it has important well-being implications: Generalized increases in ownership of durable goods trigger well-being only when the absolute effect is positive and significant.

This research shows that the absolute effect in the ownership of durable goods is small in the case of Economic satisfaction and practically nil in the case of Life satisfaction. It is also shown that the relative effect is very large, indicating that both life satisfaction and economic satisfaction are highly sensitive to relative standings in the possession of durable goods. Hence, the conveniences and services that many durable goods provide seem to generate little well-being, while most of the well-being benefits emerge from having what others do not have. This is a major issue because it may trigger a kind of status race which may end up being a social trap: people own more durable goods but have no more well-being. The chapter also shows that the phenomenon replicates in the specific case of owning a car: the greater well-being reported by those who own a car emerges from the superior social status it is associated to, rather than by the conveniences and comfort that car ownership provides.


Life satisfaction Economic satisfaction Durable goods Relative effect Absolute effect 


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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Mariano Rojas
    • 1
  1. 1.Facultad Latinoamericana de Ciencias Sociales Sede México/Universidad Popular Autónoma del Estado de Puebla MexicoPueblaMexico

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