On assets and debt in the psychology of perceived wealth

Abigail B. Sussman, Eldar Shafir

Research output: Contribution to journalArticle

11 Scopus citations

Abstract

We studied the perception of wealth as a function of varying levels of assets and debt. We found that with total wealth held constant, people with positive net worth feel and are seen as wealthier when they have lower debt (despite having fewer assets). In contrast, people with equal but negative net worth feel and are considered wealthier when they have greater assets (despite having larger debt). This pattern persists in the perception of both the self and others. We explore consequences for the willingness to borrow and lend and briefly discuss the policy implications of these findings.

Original languageEnglish (US)
Pages (from-to)101-108
Number of pages8
JournalPsychological Science
Volume23
Issue number1
DOIs
StatePublished - Jan 2012

All Science Journal Classification (ASJC) codes

  • Psychology(all)

Keywords

  • decision making
  • judgment
  • life satisfaction
  • policy making
  • poverty

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