Speaker: Zokaei Ashtini Amin, LUISS
Abstract: Despite many other factors, the relation between money and happiness has become one of the most tempting questions for scientists to answer. In this study, we approach this relation by concentrating on two functions of money (i.e. saving and spending) and explore how happiness is affected by any of them. Moreover, we compare participants from two different countries (Germany and the USA) and explore how the cultural differences may affect the individual`s behavior regarding to money and happiness.
We provided data from a computer based experiment which was completed by a total of 105 participants (50 subjects from Germany and 55 subjects from USA). Furthermore, with the help of our questionnaire we let our participants classify themselves into several behavioral economics categories, such as risk aversion, time preference, competitiveness, and others.Our main findings are: I) Germans self-classified savers who save and American self-classified spenders who spend are happier; II) People receive happiness not only from absolute wealth, also from relative wealth in comparison to others. Relative wealth (social rank) is significantly more important for Americans in comparison to Germans; III) Happiness is reducing for risk averse people when they are in danger of bankruptcy and, thus, they save more money to avoid it.