Mental Accounts: How Our Perception of Assets and Debt Affects Happiness
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Title:
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Mental Accounts: How Our Perception of Assets and Debt Affects Happiness |
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Author:
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Bhattacharya, Alok
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Advisor:
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Ball, Richard J.
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Department:
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Haverford College. Dept. of Economics |
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Type:
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Thesis (B.A.) |
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Issue Date:
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2011 |
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Abstract:
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This paper investigates the validity of ‘mental accounting,’ specifically by determining whether individuals view an additional dollar in total household assets as a dollar less in total
household debt. Furthermore, the analysis in this paper focuses on how an individual’s
perception of this assets-debt relationship affects their subjective well-being, i.e. their happiness.
This paper uses findings from previous studies to attempt to create a multivariable regression that will determine the nature of this relationship, controlling for other factors and isolating the
sample size to those individuals who are the equivalents of household heads.
In this analysis, the results demonstrate that the asset-debt relationship does not hold, supporting the theoretical background of mental framing in its explanation of how individuals view their assets and debt differently. The analysis also examines the difference in the assets-debt relationship with happiness between males and females, finding it unlikely to be different for assets, debt and household disposable income for males and females in the sample. The statistical and economic significance of physical health on subjective well-being, as well as the quadratic relationship between age and subjective well-being (as found in previous studies), is
also explored in this analysis. |
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Subject:
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Debt -- Psychological aspects
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Subject:
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Debt -- Psychological aspects -- Sex differences
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Subject:
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Assets (Accounting) -- Psychological aspects
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Subject:
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Happiness -- Economic aspects
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Subject:
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Assets (Accounting) -- Psychological aspects -- Sex differences
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Terms of Use:
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http://creativecommons.org/licenses/by-nc/3.0/us/
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Permanent URL:
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http://hdl.handle.net/10066/6931
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Files in this item
Citation
Bhattacharya, Alok.
"Mental Accounts: How Our Perception of Assets and Debt Affects Happiness".
2011. Available electronically from
http://hdl.handle.net/10066/6931.
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