| Abstract: |
Are unhappiness, high concern for money and scarcity of social capital
different faces of the same phenomenon? Economists tend to treat these
variables as distinct correlates of well-being. On the contrary, positive
psychologists argue that they all relate to materialism, a system of personal
values ascribing great importance in life to extrinsic motivations and low
priority to intrinsic motivations. Using data from two European
cross-sectional surveys and the German Socio-Economic Panel, I test the
hypothesis that material interests, proxied by the effects of individual and
reference income on well-being, are associated with low levels of social
capital. The results suggest that people with scarce social capital tend to
have greater material interests, whereas the negative effect of income
comparisons on well-being is eliminated for individuals exhibiting the highest
levels of social capital. The implication of such finding is that promoting
social capital reduces people's material concerns and has positive impact on
their well-being. The results from a country-level analysis additionally show
that, since social capital moderates the importance of income for well-being
on individual level, the well-being gap between income groups is significantly
smaller in countries with higher social capital. |