Social Indicators Research

, Volume 110, Issue 1, pp 17–29 | Cite as

Money Buys Financial Security and Psychological Need Satisfaction: Testing Need Theory in Affluence

  • Ryan T. HowellEmail author
  • Mark Kurai
  • Leona Tam


The most prominent theory to explain the curvilinear relationship between income and subjective well-being (SWB) is need theory, which proposes that increased income and wealth can lead to increased well-being in poverty because money is used to satisfy basic physiological needs. The present study tests the tenets of need theory by proposing that money can buy happiness beyond poverty if the money satisfies higher-order needs. Findings indicate that in older adults (n = 1,284), as economic standing rises, so do individual perceptions of financial security (a safety need), which in turn increases overall life satisfaction. Further, a path model tested the degree to which financial security and psychological need satisfaction mediated the path from economic standing to life satisfaction and demonstrated the complete mediation through higher-order needs—there was a 66% reduction in the direct link through financial security and a 34% reduction through psychological need satisfaction. Discussion focuses on how these mediation and path models extend need theory.


Life satisfaction Need theory Economic standing Psychological needs Financial security 


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Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  1. 1.Department of PsychologySan Francisco State UniversitySan FranciscoUSA
  2. 2.University of CaliforniaDavisUSA
  3. 3.Department of MarketingOld Dominion UniversityNorfolkUSA

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