Is Materialism All That Bad? Effects on Satisfaction with Material Life, Life Satisfaction, and Economic Motivation

The literature in economic psychology and quality-of-life studies alludes to a negative relationship between materialism and
life satisfaction. In contrast, the macroeconomic literature implies a positive relationship between material consumption
and economic growth. That is, materialism may be both good and bad. We develop a model that reconciles these two contrasting
viewpoints by asserting that materialism may lead to life dissatisfaction when materialistic people evaluate their standard
of living using fantasy-based expectations (e.g., ideal expectations), which increases the likelihood that they would evaluate
their standard of living negatively. In turn, dissatisfaction with standard of living increases the likelihood that they would
evaluate their life negatively. However, materialistic people who evaluate their standard of living using reality-based expectations
(e.g., ability expectations) are likely to feel more economically motivated than their non-materialistic counterparts, and
this economic motivation is likely to contribute significantly and positively to life satisfaction. Survey data were collected
from seven major cities each in a different country (Australia, Bosnia/Herzegovina, Germany, Egypt, Korea, Turkey, and the
USA) using a probability sample (cluster sampling method involving income stratification). The results provide support for
the model. The economic public policy implications concerning how people evaluate their standard of living using ability-based
expectations are discussed in the context of the ideals of meritocracy.