Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

Consumption and Subjective Wellbeing: Exploring Basic Needs, Social Comparison, Social Integration and Hedonism in Peru


Within material poverty contexts, consumption and subjective wellbeing are positively and strongly related. This is usually explained in terms of the increased possibilities to satisfy basic needs that additional spending provides. Other important aspects of consumption, such as its relative, symbolic and hedonic dimensions are not generally considered. The current study explores these aspects in seven poor Peruvian communities through expenditure and motives using regression analysis. Motives for consumption are included in the model drawing on psychologists’ research into the importance of accounting for motives when assessing the impact of material goals on subjective wellbeing. Results reveal that in the Peruvian corridor, consumption has a meaning beyond mere basic needs satisfaction. Status concerns, the reference group, the pleasure of consuming, providing for the household basics and the expectation of escaping social marginalisation are aspects of consumption significantly predicting people’s happiness.

This is a preview of subscription content, log in to check access.


  1. 1.

    Refer to http://www.welldev.org.uk for a detailed description of the research instruments.

  2. 2.

    The survey had three rounds. This research uses only data from the first round.

  3. 3.

    The question was: ‘Taking all things together, how would you say things are these days? Would you say you are very happy, fairly happy or not too happy? This question had already been used in the RANQ and in a previous psychometric instrument developed by the WeD Peruvian team. Therefore issues about the meaning of happiness for people of the Peruvian corridor and the translation of the concept to Quechua had all been cleared before the implementation of the I&E survey.

  4. 4.

    At 15 July 2005 1 Peruvian Nuevo sol equalled 0.25451 Euro. (http://www.oanda.com/convert/classic)

  5. 5.

    The use of adult equivalence scales is not unproblematic but it is applied here as it represents the diverse consumption requirements of different age and gender groups (see White and Masset 2006 for a methodological discussion).

  6. 6.

    Refer to Guillén-Royo (2007) for a discussion on the validity and reliability of an open-ended question on motives for consumption.

  7. 7.

    See Guillén-Royo (op. cit.) for a detailed account of the coding and labelling of the motive variables.

  8. 8.

    In this paper motives are treated as independent variables capturing local meanings of consumption. They do not depend on absolute expenditure (or vice-versa) as they were enquired in connection with people’s priorities of consumption not with regards to current expenditure. Moreover, the open-ended nature of the motives question implies that one cannot disentangle motives from goals in the given answers. Thus, a causal relationship between motives and consumption is not hypothesised here.

  9. 9.

    This accords with Cummings (1995) review of studies from developing countries and is consistent with what has been found in other WeD countries. For instance, using RANQ data, Thailand (43%) and Ethiopia (42%) show even lower percentages SM.

  10. 10.

    In this paper the analysis is done with cross-sectional data from the first round of the WeD I&E survey. However, three rounds of the survey were available with information on happiness and expenditure. Drawing on data from the three periods, a Hausman test was run to test for endogeneity in expenditure yielding non-significant results.

  11. 11.

    This is a common finding in happiness studies where the young and the old seem to be happier than the middle-aged (Frey and Stutzer 2002 p. 54). Those findings vary with regard to the econometric methods used and the cardinality or ordinality of the dependent variable (Ferrer-i-Carbonell and Frijters 2004).

  12. 12.

    The type of site dummy is dropped in models 1.b. and 1.c. to avoid multicollinearity since average expenditure is calculated at the rural, peri-urban and urban level.

  13. 13.

    Ordinal variables were created assigning weights (from 5 to 1) to each motive in descending order from the highest to the lowest ranked by the participant. This followed Clark’s (2002) approach to the study of the importance of income and wealth and the reasons to value them in South Africa. Formally: Let us call Mj motives for consumption where (j = 1, 2, 3) and j = 1 = providing the household ‘basics’; j = 2 = hedonism; j = 3 = social interaction

    Participants in the I&E survey (i = 1…399) declare up to five priorities and motives for consumption and they rank them (z = 1…5). For each rank it is assumed a score Sz from 1 to 5 where S 1 = 5; S 2 = 4; S 3 = 3; S 4 = 2 and S 5 = 1. From individuals’ responses an index (M ij ) of the relevance of motive (j) for individual (i) is defined as follows: \( M_{{ij}} = {\sum\limits_{z = 1}^5 {S_{z} * m_{{z,j}} } }, \) where \( m_{{z,j}} \) = 1 if motive j occurs in position z; \( m_{{z,j}} \) = 0 otherwise

    For each individual we can, therefore, generate a vector of motives for consumption VM i where VM i  = (\( M_{{i,1}} ;\) \( M_{{i,2}} ;\) \( M_{{i,3}} \)


  1. Appadurai, A. (1996). Modernity at large. Cultural dimensions of globalisation. London: University of Minessota Press.

  2. Baudrillard, J. (1998). The consumer society: Myths and structures. London: Sage.

  3. Bauman, Z. (2001). Consuming life. Journal of Consumer Culture, 1, 9–29.

  4. Bauman, Z. (2007). Consuming life. Cambridge: Polity.

  5. Biswas-Diener, R., & Diener, E. (2001). Making the best of a bad situation: Satisfaction in the slums of Calcutta. Social Indicators Research, 55, 34–43.

  6. Biswas-Diener, R., & Diener, E. (2006). The subjective wellbeing of the homeless, and lessons for happiness. Social Indicators Research, 76, 185–205.

  7. Bourdieu, P. (1986). Distinction: A social critique of the judgement of taste. Oxford: Routledge.

  8. Campbell, C. (1998). Consumption and the rhetorics of need and want. The Design history Society, 11, 235–246.

  9. Carver, C. S., & Baird, E. (1998). The American dream revisited: Is it what you want or why you want it that matters? Psychological Science, 9, 289–292.

  10. Colloredo-Mansfeld, R. (1999). The native leisure class. Consumption and cultural creativity in the Andes. London: The University of Chicago Press.

  11. Copestake, J. (2003). Theorising the links between social and economic development: The sigma economy model of Adolfo Figueroa. (WeD Working Paper 16, Bath).

  12. Copestake, J. (2006). Wellbeing and development in Peru. Draft book Introduction. Unpublished WeD paper presented at the Peru Workshop, Huancayo.

  13. Copestake, J., Guillén-Royo, M., Chou W-J., M. Hinks, T. and Velazco, J. (2007). Exploring the linkages between economic and subjective wellbeing along a Peruvian corridor. Paper presented at the WeD International Conference 2007—Wellbeing in International Development, Bath.

  14. Costa, P. T., Terracciano, A., & McCrae, R. R. (2001). Gender differences in personality traits accross cultures: Robust and surprising findings. Journal of Personality and Social Psychology, 81, 322–331.

  15. Clark, D. A. (2002). Visions of development. Cheltenham: Edward Elgar.

  16. Cummins, R. A. (1995). On the trail of the gold standard for subjective well-being. Social Indicators Research, 35, 179–200.

  17. Cummins, R. A. (2003). Normative life satisfaction: Measurement issues and a homeostatic model. Social Indicators Research, 64, 225–256.

  18. Demir, M., & Weitekamp, L. A. (2006). I am a so happy cause today I found my friend: Friendship and personality as predictors of happiness. Journal of Happiness Studies, 8, 181–221.

  19. Desai, M., & Shah, A. (1988). An econometric approach to the measurement of poverty. Oxford Economic Papers, 40, 505–522.

  20. Di Tella, R., MacCulloch, R. J., & Oswald, A. J. (2003). The macroeconomics of happiness. Review of Economics and Statistics, 85, 809–827.

  21. Diener, E., & Biswas-Diener, R. (2002). Will money increase subjective wellbeing? Social Indicators Research, 57, 119–169.

  22. Diener, E., & Lucas, R. E. (2000). Explaining differences in societal levels of happiness: Relative standards, needs fulfilment, culture, and evaluation theory. Journal of Happiness Studies, 1, 41–78.

  23. Diener, E., Diener, M., & Diener C. (1995). Factors predicting the subjective well-being of nations. Journal of Personality and Social Psychology, 69, 851–864.

  24. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. L. (1999). Subjective wellbeing: three decades of progress. Psychological Bulletin, 125, 276–302.

  25. Dittmar H. (Ed.) (2008). Consumer culture, identity and well-being. Hove: Psychology Press.

  26. Doyal, L., & Gough, I. (1991). A theory of human need. Basingstoke: MacMillan.

  27. Douglas, M., & Isherwood, B. (1978). The world of goods. Towards and anthropology of consumption. London: Penguin Books.

  28. Duesenberry, J. S. (1967). La renta, el ahorro y la teoria del comportamiento de los consumidores. Madrid: Alianza Editorial.

  29. Easterlin, R.A. (1974). Does economic growth improve the human lot? Some empirical evidence. In A. David, & M. W. Reder (Eds.), Nations and households in economic growth: essays in honor of Moses Abramowitz (pp. 89–125). New York: Academic Press.

  30. Easterlin, R. A. (1995). Will raising the incomes of all increase the happiness of all? Journal of Economic Behaviour and Organisation, 27, 35–48.

  31. Fafchamps, M., & Shilpi, F. (2003). Subjective wellbeing, isolation, and rivalry. Oxford: Department of Economics, University of Oxford.

  32. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? The Economic Journal, 114, 641–659.

  33. Frank, R. H. (2004). How not to buy happiness. Daedalus, 133, 69–79.

  34. Frey, B. S., & Stutzer, A. (2002). Happiness and economics. Princeton: Princeton University Press.

  35. Frey, B. S., & Stutzer, A. (2005). Happiness research: State and prospects. Review of Social Economy, 62, 207–228.

  36. Galbraith, J. K. (1977). The affluent society. (3rd edn.) London: Andre Deutsch.

  37. Graham, C. (2004). Assessing the impact of globalization on poverty and inequality: A new lens on an old puzzle. Paper for the Brookings Trade Forum, Washington.

  38. Graham, C., & Felton, A. (2006). Inequality and happiness: Insights from Latin America, Journal of Economic Inequality, 4, 107–122.

  39. Graham, C., & Pettinato, S. (2002). Happiness and hardship. Washington: Brookings Institution Press.

  40. Guillén-Royo, M. (2007). Consumption and wellbeing: Motives for consumption and needs satisfiers in Peru. PhD dissertation, University of Bath.

  41. Guillén-Royo, M., & Velazco, J. (2006). Exploring the relationship between happiness, objective and subjective wellbeing: Evidence from rural Thailand. WeD Working Paper 16, Bath.

  42. Guillén-Royo, M., Velazco, J., Camfield, L. (2008). Basic needs and happiness in thailand: exploring the linkages between objective and subjective wellbeing. In C. Brassard & T. Kusago (Eds.) Development paths and happiness: Alternative frameworks in Asia. (Forthcoming).

  43. Herrera, J., Razafindrakoto, M., & Roubaud, F. (2006). The determinants of subjective poverty: A comparative analysis between Madagascar and Peru. (DIAL, Document the travail, DT–2006–01).

  44. Hirata, J. (2001). Happiness and Economics. Dissertation, University of Maastricht.

  45. Hirsch, F. (1978). Social limits to growth. London: London and Henley.

  46. Huber, L. (2002). Consumo, cultura e identidad en el mundo globalizado. Lima: Instituto de Estudios Peruanos.

  47. Jongudomkarn, D. & Camfield, L. (2005). Exploring the quality of life of people in North Eastern and Southern Thailand. WeD Working Paper 11, Bath.

  48. Kasser, T., & Kanner, (2004). Psychology and Consumer Culture: The Struggle for a good life in a materialistic world. Washington: American Psychological Association.

  49. Kasser, T., & Ryan, R. M. (1993). A dark side of the American dream: Correlates of financial success as a central life aspiration. Journal of Personality and Social Psychology, 65, 410–422.

  50. Layard, R. (2005). Happiness. Lessons from a new science. London: Penguin Books.

  51. Leibenstein, H. (1968). Bandwagon, snob, and veblen effects in the theory of consumer’s demand. In W. Breit, & H. Hochman (Eds.), Readings in Microeconomics, 2 edn. (pp. 111–127). Illinois: Dryden Press.

  52. Lelkes, O. (2005). Knowing what is good for you: Empirical analysis of personal preferences and the ‘objective good’. CASE paper 94, London School of Economics.

  53. Luttmer, E. P. F. (2005). Neighbours as negatives: Relative earnings and well-being. Quarterly Journal of Economics, 120, 963–1002.

  54. Lyubomirsky, S., King, L. A., & Diener, E. (2005a). The benefits of frequent positive affect: Does happiness lead to success? Psychological Bulletin, 131, 803–855.

  55. Lyubomirsky, S., Sheldon, K., & Schkade D. (2005b). Pursuing happiness: The architecture of sustainable change. Review of General Psychology, 9, 111–131.

  56. Maslow, A. (1970). Motivation and personality. (2nd edn.) London: Harper & Row.

  57. McCulloch, N., & Baulch, B. (2000). Simulating the impact of policy upon chronic and transitory poverty in rural Pakistan. The Journal of Development Studies, 36, 100–130.

  58. McGregor, A., McKay, A., & Velazco, J. (2007). Needs and resources in the investigation of wellbeing in developing countries: Evidence from Bangladesh and Peru. Journal of Economic Methodology, 14, 107–131.

  59. Møller, V. (2007). Researching quality of life in a developing country: Lessons from the South African case. In I. Gough, & A. McGregor (Eds.), Wellbeing in developing countries. new approaches and research strategies (pp. 242–258). Cambridge: Cambridge University Press.

  60. Pærregård, K. (1997). Linking separate worlds. Oxford: Berg.

  61. Schor, J. B. (1998). The overspent American. (New York: Basic Books).

  62. Schuldt, J. (2004). Bonanza macroeconomica y malestar microeconomico. Lima: Centro de Investigacion de la Universidad del Pacifico.

  63. Scitovsky, T. (1986). Human Desire and Economic Satisfaction. London: Harvester Wheatsheaf.

  64. Srivastava, A., Locke, E. A., & Bartol, K. M. (2001). Money and subjective wellbeing: it is not the money, it is the motives. Journal of Personality and Social Psychology, 80, 959–971.

  65. Sen, A. (1977). Rational fools: A critique of the behavioural foundations of economic theory. Philosophy and Public Affairs, 6, 317–345.

  66. Sheldon, M. K., Ryan, R. M., Deci, E. L., & Kasser, T. (2004). The independent effects of goal contents and motives on wellbeing: It’s both what you pursue and why you pursue it. Personality and Social Psychology Bulletin, 30, 475–485.

  67. Smith, A. (1776) [1999]. The wealth of nations. London: Penguin.

  68. Van Praag, B. M. S., & Ferrer-i-Carbonell, A. (2004). Happiness quantified. A satisfaction calculus approach. Oxford: Oxford University Press.

  69. Veblen, T. (1899). The theory of the leisure class. New York: Penguin Group.

  70. Veenhoven, R. (1989). Is happiness relative? In J. P. Fargas, & J. M. Innes (Eds.), Recent advances in social psychology: An international perspective (pp. 235–247). Amsterdam: Elsevier Science.

  71. Veenhoven, R. (1991). Is happiness relative? Social Indicators Research, 24, 1–34.

  72. White, H. & Masset, E. (2006). Child poverty in Vietnam: using adult equivalence scales to estimate income-poverty for different age groups. Young Lives working paper 6, Oxford.

Download references


The support of the UK Economic and Social Research Council (ESRC) is gratefully acknowledged. The work has partially drawn on data from the Programme of the ESRC Research Group on Wellbeing in Developing Countries at the University of Bath and was undertaken as part of the ESRC Post-doctoral Fellowship awarded to the author. I am indebted to the Centre for Development and the Environment at the University of Oslo for offering me the opportunity to develop my research in a multi-disciplinary environment. I am particularly grateful to an anonymous referee for the very useful comments on earlier drafts of this paper. Finally, I would further like to thank Ian Gough and Tim Kasser for their constructive and helpful remarks.

Author information

Correspondence to Monica Guillen-Royo.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Guillen-Royo, M. Consumption and Subjective Wellbeing: Exploring Basic Needs, Social Comparison, Social Integration and Hedonism in Peru. Soc Indic Res 89, 535–555 (2008). https://doi.org/10.1007/s11205-008-9248-1

Download citation


  • Consumption
  • Subjective wellbeing (SWB)
  • Happiness
  • Expenditure
  • Motives
  • Basic needs
  • Social integration
  • Peru