The Role of Emotion in Consumption

Jan P Voon
2013 International Journal of Economics and Finance  
This paper develops and tests a model of consumption under uncertainty. The role of emotion is incorporated into the permanent income or life cycle theory of consumption (income-based model). An empirical test using structural equation modeling and China's consumer survey data (N = 6993) showed that our consumption model with anticipatory feelings performed significantly better than pure income-based consumption models. Our results have practical application for policy formulation in China.
doi:10.5539/ijef.v5n11p95 fatcat:xr24vycecbgnrbh3535o74e2bq