Abstract
People make hundreds of economic decisions each day, from what they will eat or even to decide career move. Research advocates that human behavior is strongly affected by freedom given to him and those blocks avoid them to act in accordance to their interests. The current study under hand is an attempt to explore the impact of freedom of choice on household incomes. Study consumed World Value Survey data for the years 2012-2014 for Pakistan. A simple Linear Regression analysis was used to measure the psychological behaviors on decisions which further affects the income of households in Pakistan (N=1200 where Punjab=604, Sindh=278, KPK=168 and Balochistan=150 ). Here Income of an individual is taken as dependent variable and Socio-economic variables (Freedom of choice, Mistrust, Risk aversion, Creativity, Loneliness, Age, Gender, Employment level, No. of children) were taken as independent variables. Study revealed that freedom has a positive impact on income of an individual. It is also concluded by the research that persons with higher level of perceived decision freedom tend to be more resilient and ultimately finds best ways to increase his income level.
Highlights
There are many reasons why one might be interested in human freedom
Other socioeconomic factors of individuals which are acting as an economic agent play important role in economic decision making which in turn determine level of income
This study suggested that government should take initial steps to focus on the human psychology
Summary
There are many reasons why one might be interested in human freedom. The concept of freedom of choice has a central place to spend a good quality life is quite old. Grable (2000) investigated the queries concerning risk taking attitude in ordinary business of life by observing behavioral, demographic and social features. He observed that risk acceptance was linked with being married, elder, being male, employment with sophisticated income, further education, higher financial expectations. Study used foreign direct investment to GDP, primary education, proportion of agriculture to GDP and military spending are some of the macroeconomic variables Results showed that these macroeconomic variables have significant and impact on poverty and authors suggested that these factors can help in making policies for the reduction of poverty. They concluded that poverty and risk aversion do not have direct relation
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