Consumption: Relationship to Well-being

Consumption: Relationship to Well-Being

What is the relationship between consumption and well-being? This is the question the article, “Consumption and well-being” aspires to answer in Encyclopedia of Earth. (See: “Consumption and well-being” http://www.eoearth.org/article/Consumption_and_well-being. Published: January 15, 2007, 11:33 pm Edited: January 15, 2007, 11:33 pm. Lead Authors: Global Development and Environment Inst, Neva R. Goodwin, Julie A. Nelson, Frank Ackerman, Thomas Weisskopf). To answer this question, the  article first discusses it in light of old utility theory, new utility theory, and capabilities theory. It then discusses “inadequate consumption” (i.e. poverty); “excessive and misdirected consumption” (which it cleverly terms “affluenza”); and the “ecological impact of consumption”.

The article’s conclusion (articulated as the introduction) notes that consumption has a direct bearing on the  “living standard”  of people as well as their lifestyle aims. Beyond these, people have other goals which may be hindered or supported by their consumption activities. These other goals include such things as “self-realization through work, fairness, freedom, ecological balance, etc.”. With these considerations in mind, the article concludes that consumption must be viewed more expansively than how marketers view it, since they are primarily concerned to sell things; as well, the utility theorists’ view of consumption is likewise inadequate, since they “are primarily interested in modeling consumer choice”.

In what follows, an account of how the above conclusions were reached will be attempted.

As concerns what old utility theory had to say on the question of consumption and well-being, it was argued in this theory that well-being is to be restrictively identified with pleasure; that this pleasure or utility could be measured and summed not only within a person but also across persons; and that this utility diminished with each increment of consumption (termed diminishing marginal utility). Accordingly, if these arguments were correct, it was concluded that taking money away from the rich and giving it to the poor would increase total utility in society since the rich were already experiencing diminishing marginal utility anyway from excessive consumption of luxury goods such as caviar whereas the poor still had much marginal utility to experience through the consumption of necessities such as bread. In other words, the increased utility the poor would experience from income redistribution and the enablement of consumption of necessities would more than compensate for the utility loss among the rich in the consumption of luxuries. Therefore, the desirability of income  redistribution towards greater social equity.