Income security, social comparisons and materialism

Abstract

PurposeThe purpose of this paper is to understand the effect of perceived income security (IS), materialistic values and socially driven aspirations on the financial well-being (FWB) of young Indian adults.Design/methodology/approachA questionnaire was designed using available scales for FWB and materialism. Questions were incorporated to measure social comparison and IS. A structural equation approach using data from 327 respondents was used to test a hypothesized model of FWB.FindingsThe IS has the largest positive effect, while unemployment has the largest negative effect on FWB. Overt materialism (OM) negatively affects FWB. Socially motivated aspirations have an indirect negative effect mediated by OM. Among demographic variables, income, education and stable employment increase FWB. Males have lower levels of FWB.Research limitations/implicationsThe data includes 327 respondents that were polled using convenience sampling. The results may not be generalizable to India at large.Social implicationsA common consideration when choosing a job is the salary. However, we find that IS affects subsequent FWB to a much greater extent than income level and materialistic aspirations.Originality/valueThis is the first study to look at the relative importance of materialistic aspirations vs IS in determining FWB. The results will help policy makers in devising policies and financial service providers in designing products and services that will increase the FWB of Indians.