Feeling Bad by Wanting More or Wanting More by Feeling Bad: The Materialism - Well-Being Cycle

Across the world, holding strong materialistic values is associated with reduced subjective well-being. The common inference is that higher levels of consumer materialism uniformly lead to lower levels of subjective well-being (Karabati and Cemalcilar 2010; Kasser et al. 2014; Wang et al. 2017). Our research challenges the idea that higher levels of materialism uniformly reduce subjective well-being. Using a representative longitudinal database of over 5,300 Dutch consumers across three years (2013-2015) our research improves over previous, predominantly cross-sectional, studies both methodologically and conceptually. It shows that materialism is not inherently bad and moreover that subjective well-being may also influence consumer materialism. Our multivariate autoregressive cross-lagged model address three potential sources of endogeneity which may systematically bias the size, sign and direction of the relationship between materialism and subjective well-being: measurement error, simultaneity, and omitted variables (Wooldridge 2002). Any of these sources of endogeneity causes a correlation between materialism or subjective well-being and the error term, leading to biased, and sometimes inefficient, estimates. We account for endogeneity by decomposing the observed association between materialism and well-being into true shared variance and error.