Aspirations and Economic Behavior

Abstract

This article reviews the literature on aspirations in economics, with a particular focus on socially determined aspirations. The core theory builds on two fundamental principles: ( a) Aspirations can serve to inspire, but still higher aspirations can lead to frustration and resentment; and ( b) aspirations are largely determined by an individual's social environment. Using the structure of this core theory, we discuss the implications of our framework for the study of interpersonal inequality, social conflict, fertility choices, risk taking, and goal setting. Expected final online publication date for the Annual Review of Economics, Volume 12 is August 3, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

Perceived vulnerability of job loss and satisfaction with life in the hospitality sector in times of pandemic: a multi-mediational approach

“…(Kukanja and Planinc, 2012) opined that it will reduce well-being and satisfaction with life (Chen and Spector, 1991). Perceived vulnerability to be rendered unemployed has an adverse impact on employees' relative income (Rojas, 2019) and satisfaction of material needs (Helliwell and Huang, 2014), which increase their current aspirations and expectations, and decrease life happiness (Genicot and Ray, 2020). This relationship was supported in a few related or unrelated previous psychological studies (Galla, 2016;Satici et al, 2016).…”

“…Also, findings of various studies indicated a weak direct association between absolute level of income and well-being of a person, that ultimately has some effect on life satisfaction (Fuentes and Rojas, 2001;Diener and Biswas-Diener, 2002;Divya and Paul, 2016). Literature suggests that impact of income on well-being and people's happiness is dependent on individual's income expectations in comparison to society (relative theory) (Rojas, 2019), basic living needs satisfaction (absolute theory) (Kopsov, 2019), emotional stability of individuals to bring their good or bad experiences to normal even in case of low income (adaptation theory) (Luhmann and Intelisano, 2018;Kwon and Lee, 2020), satisfaction of material needs, income aspiration levels related to circumstances and social comparisons (aspiration theory) (Genicot and Ray, 2020), etc. Substantial evidence suggests that individuals' desire to satisfy their basic material needs has more influence than absolute level of income on life satisfaction (Stutzer and Frey, 2003;Easterlin, 2005).…”

Goal-oriented agents in a market

“…This differs from setting where too high aspirations would be detrimental as they may create frustration (and thus disutility). 14 In terms of public policies, changing the base salary w or impacting the trigger level z have the same consequences as above. While modifying the base salary might be implemented by using a fairly straightforward policy, impacting z might be less straightforward.…”

Not All About Farming: Understanding Aspirations Can Challenge Assumptions About Rural Development

“…Widening possibilities and highlighting options has the potential to change perceptions and inspire people to re-think their current strategies. However, efforts along these lines would have to be cognisant of recent findings which suggest that aspirations beyond the adjacent possible can lead to adverse outcomes and fatalistic behaviour (Galiani et al 2018;Genicot and Ray 2020). Facilitating broader opportunities spanning agricultural and non-agricultural options would require coordination across a wider range of agencies to be successful.…”