Abstract
This work aims to clarify the definition of financial well-being and make propositions for building a theory of financial well-being by describing and reviewing its theoretical foundations. Although financial well-being's scope is essentially individual, it is necessary to understand it in a broader context due to its social impact and association with socio-economic progress and happiness. We follow a qualitative-descriptive method based on the literature employed in empirical works and the principles enunciated by diverse scholars and institutions. The originality of this work lies in consolidating a financial well-being definition, relating, and contrasting several of its theoretical foundations together instead of addressing them separately. We argue in favor of establishing a theory of financial well-being to define, measure, and analyze it comprehensively. This proposal considers different dimensions such as time, human needs, saving motives, and institutional policies. Our results are of interest to those involved in research about financial well-being, general well-being, and the economics of happiness.
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Source: Authors’ elaboration based on Modigliani and Brumberg (1954)
Source: Authors’ elaboration based on Xiao and Noring (1994)
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The idea for the article, literature search, data management and analysis, methodology, writing the initial and subsequent drafts, reviewing and editing, and project management were performed by OG-M. Validation of the methodology, supervision, and the manuscript final review were executed by MZ-F. All authors read and approved the final manuscript.
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García-Mata, O., Zerón-Félix, M. A review of the theoretical foundations of financial well-being. Int Rev Econ 69, 145–176 (2022). https://doi.org/10.1007/s12232-022-00389-1
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DOI: https://doi.org/10.1007/s12232-022-00389-1
Keywords
- Financial well-being theory
- Financial health
- Bounded rationality
- Behavioral life-cycle theory
- Institutional theory
- Economics of happiness