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RESEARCH ARTICLE
Luxury car owners are not happier than frugal car
owners
Adam Okulicz-Kozaryn
•
Tim Nash
•
Natasha O. Tursi
Received: 2 September 2014 / Accepted: 4 January 2015 / Published online: 8 February 2015
Ó The Author(s) 2015. This article is published with open access at Springerlink.com
Abstract The happiness literature has largely omitted the topic of consumption
so far. While some studies investigate the most expensive consumption item,
housing, there are no studies about the second most expensive item, the car. We
use 2011 wave of American Panel Study of Income Dynamics to investigate the
relationship between car consumption and happiness. Car consumption is defined
in two ways, as luxur y cars (expensive cars, [$35k) and frugal cars (inexpensive
cars). We find that luxury car ownership does not make people happier than frugal
car ownership. We discuss the practical implications of our findings and direct ions
for future research. This study is limited to the USA, and results may differ
elsewhere.
Keywords Happiness Life satisfaction Subjective well-being Car
Conspicuous consumption Luxury consumption
JEL Classification I31 E21
1 Introduction
Over the past century, the automobile, or car for simplicity, has changed our lives.
Commuting, shipping, traveling, and emergency services are all possible or greatly
improved due to a car. The car provided freedom, independence, and convenience.
On the other hand, air and noise pollution, suburban sprawl, obesity, congestion, and
traffic accidents result from car use as well. Fundamentally, the car has transformed
the built environment, especially that of recently developed areas outside of the
A. Okulicz-Kozaryn (&) T. Nash N. O. Tursi
Camden, NJ, USA
e-mail: adam.okulicz.kozaryn@gmail.com
123
Int Rev Econ (2015) 62:121–141
DOI 10.1007/s12232-015-0223-2
Northeastern United States. Unlike in Europe, America’s infrastructure is designed
around the car including not only roads and parking lots, but also single-use zoning,
suburban sprawl, shopping malls, and so forth. Did car make us happy?
The topic of cars and happiness
1
is interesting for several reasons. First, it may
seem obvious to people, espec ially males, that car, especially a luxury car, brings
about happiness. Think of a shiny, fully loaded model of Lexus, BMW, Audi, or any
other overpriced car.
2
It is easy to imagine that happiness results from such a
purchase, and that is arguably a major reason to pay extra for these cars—their
purchase promises happiness. It may appear that such a luxury car would bring
about much more happiness than a frugal car, say a Toyota Corolla or a Honda
Civic. We will argue here that this common wisdom is wrong.
Buying a car is a key financial decision for most people, as it is the single largest
purchase (after housing).
3
Accordingly, many people get themselves into financial
trouble by purchasing cars they cannot afford. There are other interesting aspects as
elaborated below. The car is related to policy, transportati on, development, and
sustainability/environmental debates. Yet, there is not a single study exploring the
relationship between car and happiness.
4
Fundamentally, it is thought-provoking to study the relationship between
happiness and any (not only car) consumption, because we are all consumers, and
arguably, we usually expect some happiness from our purchases even if we do not
think about happiness, but comfort, convenience, and so forth. Consumption is
related to personal income, and there is much attention given to income in relation
to happiness, but consumption is virtually not studied at all. Yet, what determines
actual quality of life or well-being or happiness is rather consumption, not income.
Plainly speaking, you cannot eat money—money only makes us happy because we
1
Happiness is briefly defined in Sect. 4, we use this term for simplicity instead of a more scientific term
subjective well-being (SWB). Also, we mean rather overall life satisfaction (cognition) than momentary
happiness (affect).
2
As explained later, these cars are overpriced because consumer pays not only for a product (car), but also
for conspicuous or wasteful manifestation of superiority as explained later. In another sense, these cars are
not overpriced because consumer pays for exclusivity—luxury cars are attractive because they manifest the
ability to pay what others can’t. But from economic or sustainability perspective, this is waste.
3
Surprisingly cars are not getting cheaper. The first affordable car, Model T, was only $3.5k (in today’s
dollars), but today’s affordable cars cost over $10k. Luxury cars became more expensive, too. For
instance, Porsche 911 used to cost $47k (also in today’s dollars) in 1965, now it sells for $82k. See http://
www.forbes.com/sites/quora/2013/05/07/why-are-cars-not-getting-cheap-even-with-better-economies-of-
scale/ and http://jalopnik.com/5953080/how-inflation-has-jacked-up-the-prices-of-your-favorite-cars/.
And yet the market for luxury cars is thriving (e.g., Economist 2013b). Luxury cars are so-called Veblen
goods, which become more desirable as they get more expensive.
4
There are studies including car possession dummy variable in their happiness models—yet, all of them
treat car purely as a control variable and accordingly do not give much thought, neither explore it. For details,
see World Database of Happiness: Correlational Findings on Happiness and POSSESSIONS Subject Code:
P10, specifically P10.2.2.2 at http://www1.eur.nl/fsw/happiness/hap_cor/top_sub.php?code=P10. DeLeire
and Kalil (2010) operationalize car consumption in one variable as vehicle purchase (including related
expenditures such as insurance, maintenance), and find no effect. Also, see a recent review of research on
hedonic consumption (Alba and Williams 2013), which does not mention a single study about a car.
122 A. Okulicz-Kozaryn et al.
123
can use it for consumption or imagine resulting consumption.
5
Some economists
actually recognize that consumption is a better measure of permanent income and
material well-being than income [Meyer and Sullivan 2003, cited in DeLeire and
Kalil (2010)]. Like income, consumption is a policy topic—there is an ongoing
discussion about taxing it—we already tax alcohol and tobacco, there are proposals
to tax soda, and luxury consumption could be taxed as well. Indeed, even
conservative Milton Friedman, who supported small government, has noted that if
government needed additional revenue, a progressive consumption tax would be the
best way to raise it (Frank 2010).
As rece ntly lamented by Frey et al. (2014), there are many empirical happiness
studies, but they do not focus enough on theory. Before we analyze the data for this
research, we will briefly discuss broad economic, social, and environmental
implications of car use and possible causal pathways from car consumption to
happiness. We do not claim causality in this purely correlational or observational
study. Yet, as persuasively pointed out by labor economist Andrew Oswald (e.g.,
Blanchflower and Oswald 2011; Oswald 2014), correlational studies are not without
merit despite what many economists think—many scientific breakthroughs were
first discovered in observational studies—for instanc e that smoking is related to
cancer. Experiments are now in fashion in economics, and it is often overlooked that
they suffer from many critical problems that are not inherent in observational
studies such as lack of external validity, small sample size, artificial laboratory
setting, and forced imaginary roles, such as a person pretending to be a company or
imagining winning a lottery. For a discussion, see for instance Pawson and Tilley
(1997).
In short, we contribute to the literature by conducting the first study of the effect
of car consumption on happiness. We report first results, and encourage further
investigation into the happiness derived from any, not only car, consumption.
2 Why a luxury car does not buy much happiness
From an economic standpoint, car use is desirab le—it contributes to economic
growth. Indeed, even traffic congestion contributes to economic growth (Stiglitz
et al. 2009). Likewise, any luxury consumption is preferable—the more we
consume, the higher the economic growth (at least in the short run). Yet, economic
growth, what mainstream economists usually forget, is not the only ultimate
outcome of interest. There is also freedom, physical and mental health, happiness,
and so forth. Taking the happiness perspective , it is not immediately obvious
whether a car makes us happy. On the one hand, cars arguably add convenience,
comfort, independence, freedom, coziness, travel speed, security, and control (e.g.,
Steg 2003). On the other hand, cars pollute [pollution decreases happiness, e.g.,
5
Of course, strictly speaking, income contributes to happiness in addition to consumption–savings and
investment also do affect our well-being by offering peace of mind, thrill of adventure, power/domina-
tion/envy premium, and other benefits. Furthermore, often it is not consumption per se that results in
happiness, but other factors that consumption enables, notably social capital. For instance, car has been
argued to increase happiness because it increases social connectedness (DeLeire and Kalil 2010).
Luxury car owners are not happier than frugal car owners 123
123
Weinhold (2012), Welsch (2005)] and encourage suburban sprawl (e.g., Duany et al.
2001), which in turn forces commuting. Long commute is the least enjoyable thing a
person can do (Kahneman et al. 2004 ).
6
Finally, luxury cars cost money and, hence,
time. This study uses the happiness yardstick to evaluate cars—do cars make us
happy? And do luxury cars make us happier than frugal cars?
Based on personal observations we hypothesize that frugal cars (e.g., Toyota
Corolla or Honda Civic) make us happy and luxury cars (e.g., Lexus or Audi) do not
contribute much happiness above what a frugal car delivers. Theoretically, our
hypothesis is based on an old idea of diminishing marginal utility (or happiness)—
each additional item consumed brings less happiness—say the first cake increases
your happiness by 1, the second by .5, the third by .25, and so forth, and at some
point, you get sick and experience negative utility or unhappiness. It is the same
with cars. Having a car v no car helps immensely;
7
having a good car v a junk car
helps quite a bit, but having a luxury car over a good car does not help or may even
hurt (like too many cakes). For instance, having a luxury car is likely to make you
more worried about it (being stolen, scratched, etc), and you need to work extra to
pay it off. It is especially a burden if you bought something you cannot afford.
American consumers tend to buy things they cannot afford, and worse, they buy
things they do not need, e.g., luxury cars.
A luxury car provides about the same convenience or comfort as a frugal car
does. Leather and heated seats, or fashionable shapes and colors are not likel y to be
important for human flourishing. In short, we hypothesize that there is likely to be a
greater happiness gap between people without a car and people with a frugal car,
than between people with a frugal car and people with a luxury car. Note that it
costs at least the same or more to change from a frugal car to a luxury car than to
change from no car to a frugal car. Fundamentally, economists would argue that
there is an opportunity cost. But the specific idea here is little different: Consumers
tend to underestimate how much time consumption costs them, especially if
consumption is technologically advanced or superior in some othe r way. It
somehow (falsely) appears that it is worth the extra price or labor to earn it. This
point was beautifully made by Thoreau, who incidentally used a transportation
example:
8
One says to me ‘‘I wonder that you do not lay up money; you love to travel;
you might take the cars and go to Fitchburg today and see the country.’’ But I
am wiser than that. I have learned that the swiftest traveler is he that goes
6
Kahneman et al. (2004) only looked at everyday experiences. He did not look at slavery, torture, or
other nasty things that must be even less enjoyable than commute.
7
It is true in most areas, but in some areas, notably in dense areas, such as New York, NY, car may
actually be a hassle.
8
Of course, technology has improved a lot since Thoreau’s times and his example is literally false, yet it
is still valid in terms of abstract or general meaning. These days it makes more sense to work and pay for
flight from one coast to another, than not to work and walk. But the idea is simply that we tend to forget
about the opportunity cost, and it is especially troublesome that we often do it for wrong reason—to use
fancy and glitzy train, as in Thoreau’s time or to use a luxury automobile as in our times without really
thinking about what we are doing and what we are foregoing and how that affects our utility or well-being
or happiness.
124 A. Okulicz-Kozaryn et al.
123
afoot. I say to my friend, suppos e we try who will get there first. The distance
is thirty miles; the fare nine ty cents. Th at is almost a day’s wages. I remember
when wages were sixty cents a day for laborers on this very road. Well, I start
now on foot and get there before night; I have travelled at that rate by the week
together. You will in the mean while have earned your fare and arrive there
some time tomorr ow, or possibly this evening, if you are lucky enough to get a
job in season. Instead of going to Fitchburg, you will be working here the
greater part of the day.
You can buy a luxury Lexus for $50k or a frugal Corolla for $25k; the difference
is $25k—enough to buy 10 vacations at $2.5k.
9
However, what is more fundamental
and often overlooked is that buying a Lexus costs time (spent working to earn it),
and the amount of it depends on your salary. Even for rich people (say annual
income $250k), it still makes a difference to spend $50k versus $25k; for super
rich (say annual income [ $1m), it does not make much difference; but for the
middle class (annual income $50k), it makes a big difference—if a person makes
$10 per hour after tax,
10
then a Lexus costs 2,500 h over a Corolla, which translates
into 312 extra days of work (8 h per day). Excluding weekends and holidays, it is
well above a year. This is a lot of foregone time! But even for a rich person, who
makes say $100 per hour after tax, it would cost her well above a month of time—
not an insignificant cut. A recent survey found that a median income of a luxury car
owner is surprisingly low at $100,000 per annum (Sullivan 2014). Still, all the extra
time spent working to buy a luxury car may be worth it, if it buys happiness. If it
does not, what is the point?
If we can establish that luxury cars do not contribute much to happiness, would
taxing luxury consumption be justified? Probably. We should keep in mind that
resources are limited. For instance, money spent on Lexuses is not spend on food or
other necessities. Furthermore, conspicuous consumption results in an arms race—
people want to outcompete others with ever more luxury items and in doing so
create more ‘‘wants’’ in society (Frank 2012).
A related argument to scarcity of resources is about sustainability and the
environment. If cars, and especially larger, more polluting SUVs (sport utility
vehicles), do not bring muc h happiness, but pollute and destroy the environment
significantly, we should simply tax their use. If on the other hand, cars contribute
significantly to our happiness, then the debate is open. What is more important, our
happiness or pollution? We will not pursue this debate further; we just want to
signal that pollution is arguably an important negative externali ty that needs to be
9
This is approximate pricing—the point is that a new luxury car costs at least twice as much as frugal car
in the USA. For instance, as of Aug 2014, frugal Toyota Corolla is listed for $16.8k, frugal Honda Civic
costs $18.4k, but luxury Lexus (IS) costs $36.5k and Audi (A3) costs $30k (to be conservative in luxury–
frugal price comparisons, all cars are the cheapest versions. If most expensive versions were compared,
the difference would be larger).
10
Median household income in the USA is about $50,000 annually, and many of the households in that
range have two incomes. Two people who both work full time for $12 per hour would make about
$24,000 each ($12 per hour 40 h per week 50 weeks (assume 2 weeks vacations)) and have $48,000
combined income, which is slightly below US median household income. All numbers in this footnote are
before-tax.
Luxury car owners are not happier than frugal car owners 125
123
taken into account along with happiness when evaluating cars. In fact, by one
estimate, car emissions kill more people than car accidents do (Jaffe 2014). Even
Milton Friedman would tax car pollution (McMahon 2014 ).
From an environmental sustainability perspective, cars are a problem. They
obviously pollute, but they also correlate with wasteful urban sprawl (Kay 1997;
Duany et al. 2001). In the USA, it appears, car penetration of the market already
peaked. Accordi ng to OICA,
11
the number of passenger cars in use has been
declining since 2008. But worldwide, it is growing. In 2005, there were 652 m
passenger cars in use, and in 2012, there were 833m cars. And there is room for
increase—the motorization rate (vehicles/1,000 inhabitants) in 2012 was 791 in the
USA, 563 in the European Union, but only 79 in China and 18 in India.
12
It will be
an environment al problem when poor countries like India and China keep on adding
more people to the middle class and if that middle class is consuming cars like the
US middle class. In China, the luxury car market has grown over the past decade at
36 % a year (26 % yearly increase for all cars). Other BRIC countries (Brazil,
Russia, India, and China) also have a ‘‘big appetite’’ for luxury cars (Economist
2013b). In developed countries, on the other hand, there appears to be a shift
happening toward more frugal and environmentally friendly cars. America often
sets the consumer trends in the World, and California sets the trends in America—
the Toyota Prius tops the Honda Civic as California’s bestselling vehicle.
13
We will
not purse this line of thought further—for more elaboration on the topi c of
environmental sustainability and consumption, see Bergh (2011), Daly (2013),
Kallis (2011), Kallis et al. (2012). On the other hand, what is often forgotten is that
transportation was by no means clean before the car. Cities, for instance, used to
drown in horse manure (Morris 2007; Levitt and Dubner 2010). In that sense, the car
is a cleaner solution than a horse, but public transportation is even cleaner.
While there is no literature about the relationship between car and happiness,
there is literature about nonpecuniary v pecuniary consumption. For instance, see
work by Frank (2004, 2005, 2012). In short , we should buy experience (e.g.,
vacation, bowling) not things (e.g., Lexuses, Audis) (Kumar et al. 2014). The
problem with satisfaction received from material consumption is that it stimulates
needs. A person is on a ‘‘hedonic treadmill’’ chasing luxuries but never catching
lasting happiness.
14
Experience consum ption (e.g., bowling, fishing, swimming)
does not suffer from this problem or at least suffers to a lesser degree. While luxury
consumption does not result in lasting happiness (e.g., Linssen et al. 2011), it may
actually result in short-run happiness, especially if a person is materialistic (Hudders
and Pandelaere 2012 ). Materialism is related to luxury consumption, but beyond the
11
See http://www.oica.net/category/vehicles-in-use/. OICA stands for Organisation Internationale des
Constructeurs d’Automobiles; in English: International Organization of Motor Vehicle Manufacturers.
12
See http://www.oica.net/category/vehicles-in-use/. For more discussion, see Economist (2013a).
13
See http://articles.latimes.com/2013/jan/23/business/la-fi-autos-prius-20130123.
14
Which does not mean that luxury car buyers do not obtain other outcomes of interest than happiness,
for instance pride. Just like New Yorkers do not get happiness by living in New York, NY, but they get
pride (Balducci and Checchi 2009).
126 A. Okulicz-Kozaryn et al.
123
scope of this study—for a brief discussion of it and its relationship to happiness, see
Hudders and Pandelaere (2012).
This section ends as it started—with popular wisdom about luxury car resulting
in happiness. There is a sense that a car, especially a luxury car, will bring you
happiness by means of making you special, outstanding, and so forth, or by
signaling or reaffirming these qualities. A luxury car is a status symbol—it signifies
high social rank or class.
15
Simply speaking, a luxury car is intended to show that
you are better than others—say accomplished or arrogant. McFerran et al. ( 2014)
put it this way: Luxury consumption may be sought out of heightened feelings of
accomplishment (and not arrogance), but it instead signals arrogance to others
(rather than accomplishment). Yet, whatever the reasons are for luxury consump-
tion, beni gn (accomplishment) or malicious (arrogance), it doesn’t change the fact
that luxury consumption or conspicuous consumption is wasteful (in an economic or
monetary sense).
16
Indeed, Veblen who coined the term ‘‘conspicuous consump-
tion,’’ also has argue d that conspicuous consumption is waste (Veblen 2005a, b).
Yet much of the marketing peddles luxuries implying something quite opposite to
waste, something great and glorious. Lexus, for instance, has really make-you-feel-
special commercial s: ‘‘F provokes lust. It unleashes wrath. It incites envy. And it
elicits pride. Temptation comes in many heart pounding forms, but only one letter.
F. The performance mark from Lexus.’’
17
Hence, if you buy a Lexus, you will also
get lust, wrath, envy, pride, and people buy it. Another reason to buy a Lexus is to
show that you are pursuing ‘‘perfection,’’ as another commercial puts it,
18
so
arguably by virtue of driving a Lexus, you are in some way closer to perfection, or
at least you are in pursuit. It remains for future research to determine whether Lexus
owners are more ‘‘perfect’’ than thos e buying cheap cars, but in this study, we test
whether Lexus and other luxury car owners are happier than others.
3 When a luxury car does buy happiness
We are not against cars in general. On the contrary, we think that frugal cars may
bring more happiness than pub lic transportation (especially assuming no heavy
traffic and a reasonable commute) as suggested by Morris and Guerra (2014).
Furthermore, as explained in this section, there are situations where a luxury car
probably does result in lasting happiness.
15
Car even remains a status symbol when it is a ride-sharing service such as Uber, that is, your status is
higher if a car that drops you off is luxury as opposed to ordinary (Ryzik 2014). Likewise, car rentals or
luxury taxis or limousines boost status—people pay extra for them because they buy status.
16
It could be counterargued that yesterday’s luxuries such as a toilet or hot water are today’s necessities,
and in that sense, luxury consumption simply signifies progress. This is arguably true with respect to
many goods, but it is false with respect to many other goods. A key distinction between progress and
waste is usefulness. While toilet over no toilet is useful, toilet made of gold over toilet made of cheap
plastic is waste, and so forth.
17
See https://www.youtube.com/watch?v=pqsPdpoCedo.
18
See https://www.youtube.com/watch?v=16hPBsw2Uy4.
Luxury car owners are not happier than frugal car owners 127
123
There are several exceptions when we think that a luxury car does buy happiness.
For instance, imagine
19
a person dreaming her entire life about a ’57 Chevy, and then
she finally owns it. If you are truly passionate about some car, a purchase of that car
may result in lasting happiness, but if you just bought a luxury car because everybody
at your workplace does, or to impress someone, or for other similar reason, then it
would likely not result in lasting happiness. Arguably, many people rationalize other
needs such as pride, success, or accomplishment signaling with genuine need. That is,
they have some wants, but they justify or rationalize them as needs.
Also, people may not have to necessarily dream about a specific car their whole
life but simply ‘‘be into cars’’—a passionate mechanic (not every mechanic is
passionate), or someone who passionately participates in racing. If you have genuine
passion or interest, then again, we speculate (for future research, not tested here)
luxury cars are likely to result in lasting happiness. But people who really dream
about some car or ‘‘are really into cars’’ are just few percent of population at most,
and likely a small fraction of a percent. What makes a fake impression that most
people derive happiness from a luxury car is simply that luxury cars are a popular
want in consumerist society and a status symbol, and because status is related to
happiness, it appears that its symbols are related as well. Arguably, advertising and
marketing contribute to generating wants disguised as needs—people think they
really need a luxury item not realizing that it is a want. On the other hand, some
people may need luxury cars for objective reasons—for instance, their line of work or
their business may benefit from it, say their clients or partners would treat them more
seriously (e.g., Economist 2013b). A luxury car may also benefit its owner by raising
her confidence and self-esteem, however illusory or shallow it may be. Yet another
explanation is, as probably many luxury car owners would put it, they may not
necessarily buy luxury cars because they really need it (as many people really need
some car to get around), but they may justify the price premium with quality,
craftsmanship, and other similar arguments. This may be true for some people.
Another justification of a luxury car purchase is when a person spends a lot of time in
a car, say uses it as a ‘‘mobile office,’’ then extra features may matter more for well-
being than in a typical case. The key distinction, not tested here, is not really luxury v
non-luxury, but why you buy it.
20
If you really need it or really want it (being
passionate about cars) for what it is, then buy it. If you think you need it by
rationalizing your want, then a luxury car probably will not increase your happiness.
Again, we think that the vast majority of people do not really need luxury cars . Yet,
even those who really need them may not derive lasting happiness from them,
because humans simply get used to material possessions (hedonic adaptation).
21
19
See http://www.today.com/parents/keys-happiness-son-surprises-dad-57-chevy-57th-birthday-2D7976
9669 and there are multiple similar stories when people are probably happy by spending a fortune on a
car, e.g., http://www.forbes.com/2005/03/04/cz_ms_0304guide.html, but this is a tiny minority.
20
It will be difficult to test in the future research, because, as argued above, people are likely to
rationalize their wants as needs.
21
Yes, we also get used to frugal cars, but these cars cost half of the price of a luxury car or less.
128 A. Okulicz-Kozaryn et al.
123
4 Happiness
The audience of this journal is familiar with the concept of happiness, and hence it
will be described only briefly
22
—happiness can be defined as ‘‘people’s cognitive
and affective evaluations of their lives’’ (Diener et al. 1995, p. 851), which is
virtually the same as Veenhoven’s (2008, p. 2) defini tion: ‘‘overall judgment of life
that draws on two sources of information: cognitive comparison with standar ds of
the good life (contentment) and affective information from how one feels most of
the time (hedonic level of affect).’’ Some scholars make a distinction between
happiness and life satisfaction—Life satisfaction refers to cognition and happiness
refers to affect. Life satisfaction is a cognitive aspect of happiness (e.g., Dorahy
et al. 1998). We will not pursue this dichotomy because we have only one survey
item, which likely capture s mostly life satisfaction but also happiness to some
degree. Therefore, the overa ll happiness definition by Veenhoven (2008) seems
most appropriate and we will use the terms ‘‘happiness’’ and ‘‘life satisfaction’’
interchangeably to denote a more scientific term ‘‘subjective well-being (SWB).’’
Happiness measure, even though self-reported and subjective, is reliable and valid
(e.g., Tella and MacCul loch 2006; Myers 2000), and closely correlates with similar
objective measures of well-being such as brain waves (Layard 2005). Finally, to
avoid confusion, happiness is very different from customer satisfaction about some
product, say car. As explained above, happiness is a very broad evaluation of life as
a whole, whereas customer satisfaction is satisfaction or merely an evaluation of
some service or a product. In that sense, it is not contradictory that consumers may
be mor e satisfied with luxury cars,
23
and yet not happier.
Importantly, there are three major theories, and they are all relevant with respect
to car consumption. The adaptation theory (Brickman et al. 1978) argues that there
is adjustment to external circumstances and we are on a ‘‘hedonic treadmill.’’ ‘‘The
more one has the more one wants, since satisfactions received only stimulate instead
of filling needs’’(Durkheim [1895] 1950). We get used to (adapt to) a car, too—you
have probably experienced it yourself—were thrilled with a new car for a few days,
happy for a few weeks, but after a few months, it does not make much difference.
The multiple discrepancy theory (Michalos 1985) states that happiness is a result of
social comparison or a comparison to various standards. I compare my car to those
in the parking lot at my workplace and in my residential area, even on the road. I
compare it to standards—for instance, what kind of a car is a social scientist in the
USA supposed to drive? I am happy to see many Priuses in the parking lot of my
university—other social scientists, like me, prefer small and ‘‘green’’ cars . Lawyers
and business school faculty, on the other hand, appear to like luxury cars, and so do
physicians. One of them told me that she drives a Lexus because that’s what
physicians drive. In that sense, a lack of Lexus may be an obstacle to happiness,
because one needs it to be socially accepted and connected, and social capital is key
22
For more complete treatments, see any of the following reviews: Helliwell (2014), Ballas (2013),
Diener (2013), Diener et al. (2013), Veenhoven (2012), Erdogan et al. (2012), Proctor et al. (2009), Frey
and Stutzer (2002).
23
For instance, J.D. Power Customer Service Index indicates higher satisfaction for luxury brands than
for mass market (http://www.jdpower.com/press-releases/2014-us-customer-service-index-csi).
Luxury car owners are not happier than frugal car owners 129
123
for happiness (e.g., Putnam 2001). The needs/livability theory (Veenhoven and
Ehrhardt 1995; Veenhoven 2014) posits that happiness results from objective living
conditions and from fulfillment of our needs, and predicts that luxury cars do not
contribute to happiness more than frugal cars—both will take you from point A to
point B. No wonder that a creator of livability theory, Ruut Veenhoven, drives a
frugal Volkswagen, and not a luxury Mercedes. For a recent discussion of
adaptation and comparison, see Frey et al. (2014).
5 Data and results
This study uses the Panel Study of Income Dynamics (PSID) data set. The happiness
question reads ‘‘Please think about your life as a whole. How satisfied are you with
it? Are you completely satisfied, very satisfied, somewhat satisfied, not very
satisfied, or not at all satisfied?’’ and it is measured on a scale from 1 = ‘‘Not at all
satisfied’’ to 5 = ‘‘Completely satisfie d.’’ This question was first asked in 2009 and
then again in 2011; 2013 data are not available yet, and hence, we use a cross
section only for 2011, the most recent year available. There is very little variation in
car ownership from 2009 to 2011, and hence, it is left for future research to take
advantage of the panel design, when more data become available. Even though
happiness is ordinal, Ferrer-i-Carbonell and Frijters (2004) showed that treating it as
cardinal in regression does not change results substantially, and therefore, we use
OLS. Control variables are those typically used in happiness research (e.g., Okulicz-
Kozaryn 2011). This study focuses on the first car in a household, which is the
newest car, and hence, it arguably should have the largest impact on happiness.
Because it seems not possible to determine which car belongs to which respondent
within a household or is most frequently used by that respondent, we will also
examine a total number of cars in a household. Variable definitions and summary
statistics are in ‘‘Appendix.’’
First, we follow the extant literature by simply treating car ownership as a binary
variable (per family, not per person)—car v no car (
OWN CAR)—results are set in
Table 1 . Column a1 shows a bivariate relationship—as expected owning a car pays
off in happiness. This result, however, is biased because owning a car correl ates
with wealth. Column a2 adds
TOTAL FAMILY INCOME and car effect size drops
substantially. In column a3, further controlling for affluence, whether a person
OWNS
A DWELLING
(base case), RENTS A DWELLING,orOTHER THAN OWN/RENT A DWELLING, kills
significance on
OWN CAR. Simply by taking into account income and housing
situation, a car does not contribute to happiness. Finally, column a4 adds other key
predictors of happiness,
AGE, AGE SQUARED, MARRIED, and (self-reported) HEALTH.
Other controls are also added, because they may matter for the car-happiness
relationship. N
UMBER OF CHILDREN IN HOUSEHOLD
24
arguably matters with respect to
the car—the car may add more convenience if there are children in a family. As
24
Note, PSID original definition uses term family unit (FU): ‘‘The FU is defined as a group of people
living together as a family. They are almost always related by blood, marriage, or adoption. And they
must all be living in the same HU,’’ where HU is a household unit—see https://psidonline.isr.umich.edu/
Guide/FAQ.aspx?Type=5#90.
130 A. Okulicz-Kozaryn et al.
123
hypothesized earli er, a car may have a differential effect by gender—males’
happiness may depend more on a car than that of females; hence, the
MALE dummy
is added to a model. Also a dummy for state is added—not only are US states vastly
different, but also a car is a virtual necessity in most states in the middle of the
country, while in the North East or on the West Coast it may actually be a hassle due
to heavy traffic, expensive parking, and relatively decent public transportation.
When these controls are added in column a4,
OWN CAR becomes negative. Hence, the
apparent positive bivariate relationship between car and happiness is spurious—it
disappears or even becomes negative when controlling for relevant predictors of
happiness. Let’s explore further—the following sets of models will use different
operationalizations of car consumption following the same sequential adding of
controls in columns 1 through 4.
Table 1 OLS regression of happiness
a1 a2 a3 a4 b1 b2 b3 b4
Own car 0.15*** 0.08* -0.02 -0.11**
1 car -0.03 -0.05 -0.09* -0.13***
2 cars 0.26*** 0.20*** 0.10* -0.05
3 cars 0.30*** 0.22*** 0.10* -0.02
4 or more
cars
0.22*** 0.12* -0.01 -0.15*
Total
family
income
0.00*** 0.00*** 0.00*** 0.00*** 0.00*** 0.00***
Rent a
dwelling
-0.23*** -0.08** -0.18*** -0.07**
Other than
own/rent
a
dwelling
-0.34*** -0.20*** -0.29*** -0.19***
Number of
children
in
household
0.04*** 0.04***
Health 0.20*** 0.20***
Male -0.05 -0.06*
Married 0.30*** 0.28***
Age -0.03*** -0.03***
Age2 0.00*** 0.00***
State
dummies
No No No Yes No No No Yes
Constant 7.70*** 7.67*** 7.89*** 7.47*** 7.70*** 7.68*** 7.85*** 7.50***
N 8,902 8,901 8,901 8,871 8,902 8,901 8,901 8,871
þ
p\0:10; p\0:05; p\0:01; p\0:001
Luxury car owners are not happier than frugal car owners 131
123
We turn to number of cars per family, which are distributed as follows: 0 cars
(16 %), 1 car (34 %), 2 cars (33 %), 3 cars (12 %), 4 cars or more (5 %).
Results are also set in Table 1 (columns b1–b4). Contrary to expectations,
families with one car are no happier than people without car (base case; using public
transportation), and less happy than people with more cars. When controlling for
income (b2), the happiest people are those with 2 or 3 cars (per family), but not
more than that. This pattern persists when controlling for the housing situation (b3).
Finally, when looking at the most complete set of controls in column b4, there are
no significant differences across the number of cars dummi es, and no quantity of
cars results in more happiness than no car.
Two previous operationalizations of car consum ption are limited, because cars
differ enormously—there are cars that barely work, and such cars may actually
generate misery, and there are cars more expensive than houses. The main focus of
this paper is luxury consumption of cars. We simply define a luxury car as an
expensive car. Car price has been broken into dummi es. Table 2 shows price
categories along with a brief description or motivation for a categor y and
frequencies. Regression results are set in Table 3. There are fewer observations
because price data are missing for many cars.
The results are mostly as expected, but a few interesting patterns emerge. In
column c1 (without controls)— owning a junk car ($0–5k) is no better than owning
no car, but a luxury car ($[35k) brings more happiness than a frugal car ($5–35k).
This unexpected resu lt is due to omitted wealth from this regression—again, it is not
luxuries but wealth that contributes to happiness. In column c2, a basic control for
wealth, income, is introdu ced and it already makes the coefficient on luxury car
smaller in magnitude than very good car ($23–35k). Adding more wealth controls
(housing situation) in column c3, makes luxury car insignificant. Finally, with a full
set of controls in column c4, none of the price dummies remain significant, but cars
within two mid-range categories ($15–35k) contribute to happiness the most. We
have also tried different cutoff points, and the results were similar.
Finally, as a robus tness check, we control for an additional variable. As argued
earlier with respect to the ‘‘hedonic treadmill,’’ it is important to take into account
Table 2 Categories of cars by price range
Price range Name Description Frequency
$0 No car No car 1,464
$0–5k Junk car More trouble than help 700
$5–15k A car that works This should increase happiness 808
$15–23k Reliable car This should increase happiness even more 668
$23–35k Very good car But not much more happiness from it than
that form a reliable car
583
$[35k Luxury car No happiness from its use over cheaper cars,
perhaps unhappiness due to opportunity
cost, etc
191
Only using cars that were purchased in 2009 or later: As argued earlier, the effect from a car is likely to
disappear over time. Also, for simplicity, only using price for the newest car
132 A. Okulicz-Kozaryn et al.
123
Table 3 OLS regressions of happiness
c1 c2 c3 c4 d1 d2 d3 d4
Car $0–5k -0.03 -0.03 -0.06 -0.05 -0.26*** -0.23*** -0.16** -0.06
Car $5–15k 0.11* 0.09
?
0.02 -0.05 -0.13** -0.11* -0.07
?
-0.05
Car $15–23k 0.23*** 0.19*** 0.09
?
-0.00
Car $23–35k 0.33*** 0.27*** 0.15** 0.03 0.10* 0.08
?
0.05 0.05
Car $[35k 0.36*** 0.24** 0.11 -0.05 0.12
?
0.05 0.02 -0.01
Total family income 0.00*** 0.00*** 0.00** 0.00*** 0.00*** 0.00
Rent a dwelling -0.19*** -0.04 -0.19*** -0.10*
Other than own/rent a dwelling -0.27*** -0.13
?
-0.33*** -0.22*
Number of children in household 0.04** 0.02
Health 0.20*** 0.21***
Male -0.07 0.00
Married 0.29*** 0.26***
Age -0.03*** -0.01*
Age2 0.00*** 0.00*
Year in which acquired first car 0.02 0.02 0.03 0.04
?
State dummies No No No Yes No No No Yes
Constant 7.70*** 7.69*** 7.87*** 7.42*** -24.53 -27.65 -51.10 -63.57
N 4,413 4,413 4,413 4,392 2,949 2,949 2,949 2,943
þ
p\0:10; p\0:05; p\0:01; p\0:001
Luxury car owners are not happier than frugal car owners 133
123
when a car was purchased—its effect on happiness is likely to decrease dramatically
over time. PSID provides
YEAR IN WHICH ACQUIRED FIRST CAR, but unfortunately there
is no exact date.
Results are shown in the same Table 3 in columns d1–d4. These models exclude
people without car in order to control for year of purchase (2009, 2010, or 2011),
and the sample size drops further.
Now, the base case is the reliable car category ($15–23k). A luxury car only
appears to bring more happiness than a reliable car in column d1, but in more
elaborated subsequent specifications, its effect becomes insignificant. Also as
expected, in all specifications (except d1), a very good car ($23–35k) actually brings
more happiness than a luxury car ($[35k) further confirming that luxury car owners
are not any happier. As expected,
YEAR IN WHICH ACQUIRED FIRST CAR is positive—the
more recent the purchase, the more happiness.
In addition, we have also tried adding a quadratic term for car price to find the
inflection point, which is at $41k (using a full set of controls from column 4). Our
conclusion is that, on average, the consumption of luxury cars does not contribute to
happiness beyond a good frugal car ($15–35k).
6 Conclusion, limitations and future research
There is not much happiness to be gained from car consumption when taking into
account other happiness predictors. Especially junk cars ($0–5k) are not contributing
much to happiness. The optimal car consumption price range is som ewhere betwee n
$15 and 35k. This is a wide range. Arguably, results would differ by life circumstances
or household characteristics—for instance indebtedness, proximity to workplace,
occupation, and so forth—we leave it for the future research to explore it further. We
find that there is no gain in happiness d ue to the consumption of luxury cars ([$35k)
over good frugal cars ($15–35k), and if anything people consuming luxury cars are less
happy than those consuming good frugal cars controlling for income and other
happiness predictors. As suggested above, there are many explanations, but possibly
the most convincing one is that of time loss. Again, a middle-class consumer (hourly
Utility
Income
Expected/Decision
U
1
U
2
Y
1
Y
2
Fig. 1 Expected versus
experienced utility (or
happiness). We make decision
about income (or consumption)
based on expected or decision
happiness, but the experienced
or true happiness is lower when
we achieve greater income or
consumption
134 A. Okulicz-Kozaryn et al.
123
wage after tax at $10) who purchases a luxury car over a frugal car looses one year of
time (assuming a 40-h work week, excluding weekends and holidays) to earn the
additional $25k required to upgrade to a luxury car.
Fundamentally, it appears that we are about to witness or perhaps we have
already witnessed with the 2008 financial crisis, the beginning of the end of
consumerism era (again, in that year also car penetration of the US market peaked).
There may be a cultural shift happening also with respect to cars—for instance,
more people may be deci ding that they do not really need a car.
25
For a general
discussion of a possible end of the consumerist era, see Ivanova (2011). Finally,
keep in mind sustainabi lity and environment. Not only luxury cars do not bring
about more happiness than frugal cars, but they also pollute more (especially large
SUVs), and this is another argument against luxury cars.
All this begs a question: If luxury cars don’t make us happy, why do we buy them?
One answer was suggested earlier—we buy them for other reasons—pride, prestige,
power or superiority demonstration, and so forth. But there is also the happiness
miscalculation explanation. A useful concept of expected v experienced utility
(Kahneman et al. 1997) helps to illustrate it in Fig. 1.Wedecideonmuchofour
consumption (cars, houses, etc.) and income (how hard and how long to work) based
on the expected utility (or happiness)—and we are often (predictably) wrong—we
think that higher income and consumption will make us happier than they actually do.
Another explanation given by Frank (2004, 2012) is that people tend to think
mistakenly that they can outcompete others and do not realize that status or positional
or luxury consumption is, by definition, a constant struggle that cannot be won.
Positional goods improve h appiness not because they are useful, but because they
secure a better position in a society. But for there to be winners, there have to be losers,
so the pie does not grow and society as a whole is not better off with more luxury cars.
Yet another explanation is, as Galbraith has argued, that marketing or advertising
makes peopl e buy things (e.g., luxury cars) that they do not need (Dutt 2008).
A related puzzle is that humans have always wasted money on conspicuous
consumption—not only post-Enlightenment Veblen’s observations, but also, for
instance, in ancient times, there is some condemnation of wasteful consumption as
reported in the Bible. Likewise, there always have been smart voices to stop it, and
probably forever will—perhaps, the fundamental problem with conspicuous
consumption is that it signals status, power, superiority, and these attributes will
always be sought after. Hence, while there may be a cultural shift happening away
from luxury consumption as speculated above, significant luxury consumption may
stay with us forever.
Although we do not explore this further here, perhaps, luxury consumption is one
explanation for the Easterlin Paradox
26
—that despite increase in income, we are not
happier—maybe we simply spend our money unwisely—if we spend it on bowling
or fishin g, we could have been happier than wasting it on Lexuses and Audis.
25
For instance, see http://www.nytimes.com/2009/10/22/automobiles/autospecial2/22CHANGE.html?
pagewanted=all&_r=0.
26
Note, however, that some scholars argue that there is no Easterlin Paradox, for instance see Veenhoven
and Vergunst (2013).
Luxury car owners are not happier than frugal car owners 135
123
There are limitations, and at the same time directions for future research. First,
causality can be addressed when more waves of data become available. Second, one
can think of a quasi-experimental design—for instance, taking advantage of
situations where a car is donated, inherited, or won in some lottery. Finally, it would
be interesting to explore this relationship in othe r countries—Americans after all are
in many ways exceptional. There exist good quality panel surveys containing
happiness indicator, and possibly car information in other countries—for instance the
German Socio-Economic Panel (GSOEP), and the British Household Panel Survey
(BHPS). The present study examines the relationship in the US, where there is much
of conspicuous consumption, inequality, and luxury cars. Also, authors live in the
USA and are familiar with cars there. Yet, the advantage of other long-running panel
datasets such as GSOEP or BHPS is that happiness can be modeled as a panel. This is
important—the car is a proxy for values and preferences, maybe even personality,
and hence, it may be other attributes of persons that correlate with the car that are
responsible for its spurious effect on happiness. An important limitation in studies of
luxury or conspicuous consumption is that of reverse causality as pointed out by
Linssen et al. (2011)—people may consume luxuries because they are unhappy in the
first place. Luxury shopping can arguably lighten up a day. Future research should
explore reverse causality. Yet again, as persuasively pointed out by labor economist
Andrew Oswald (e.g., Blanchflower and Oswald 2011; Oswald 2014), correlational
studies are not without merit despite what many economists think—many scientific
breakthroughs were first discovered in observational studies.
Conceptually, there are perhaps two key limitations. The first limitation is only
apparent and arguably does not hold. It may appear that a car is like the other
consumption goods, say a computer or a piece of furniture, and as such it may have a
very short-lived and negligent effect on our happiness, because we consume so many
of different items every day. Car is different, however. Keep in mind that the car is
the second most expensive item most people buy in their lifetime, and an average
person has to work for a year to earn it (a new medium-priced car)—it surely should
increase happiness. But perhaps we consume so much that no single item, even a car,
makes us happy any more. Perhaps, a person purchasing a Model T or a luxury car a
century ago was happy. It may be so, but it does not change the fact that today there is
little happiness from car consumption and no extra happiness from luxury car
consumption. The second conceptual limitation is more serious. The high price of a
car is only one indicator of luxury or conspicuous consumption. Luxury consumption
can be defined in relative terms—for instance, a medium-priced Chevrolet Camaro or
Ford Mustang could be categorized as luxury and conspicuous for working or even
middle-class consumers. On the other hand, an expensive Porsche would be
conspicuous or luxury for upper middle-class consumers, but Camaro or Mustang
may not be conspicuous or luxury for them. This is a similar consideration to one
discussed earlier that the richer the person, the less damaging and wasteful for that
person luxur y consumption is. Likewise, there are many poor people buying cars
they cannot afford, and these cars are not necessarily very expensive. Finally, there
can be luxury and conspicuous cars that are inexpensive—old Lexuses or Porsches,
or frugal cars with extra conspi cuous features such as rare animal leather seats. These
limitations are also directions for future research.
136 A. Okulicz-Kozaryn et al.
123
As most happiness research (including and following that of Bentham), this study
ignores the fact that pleasures or happiness derived from different experiences are
arguably qualitatively different—clearly happiness from driving a Lexus is different
from that of having a child or eating a great hamburger, not only in intensity or level
but also in quality. For some discussion of this important limitation, see Nussbaum
(2012). There is, however, not much that can be done to alleviate this limitation
using large scale surveys. Perhaps, a qualitat ive study such as a case study could
shed additional light on this aspect of car consumption.
Most happiness studies lump together cognitive and affective aspects of
happiness as we do here—one reason to do it is the lack of detailed multiple
measures of a construct, and usually it is not a critica l problem. It would be useful to
distinguish between these two concepts with respect to luxury consumption.
Perhaps, luxury consumption affects more happiness (affect) than life satisfaction
(cognition). On the other hand, luxury consumption may also impact life satisfaction
(cognition) by signaling accomplishment.
There are policy implications. As suggested here, many consumers, especially those
with limited resources, may be better off not purchasing luxury cars. A straightforward
way to improve consumption is for consumers to think critically about reasons for their
purchases. Another solution to overconsumption of luxuries is a luxury tax. A similar
measure is an increased personal income tax and redistribution. Piketty et al. (2011)
have recently calculated that we can tax the rich as high as 80 % and they will be fine
and continue to work hard—it won’t kill the goose lying golden eggs. On the other
hand, as argued earlier, the higher the income, the less of a problem luxury
consumption is for a consumer (not for society), because she needs to work less time to
afford this waste (luxury consumption). In that sense, the richer you are, the less of a
problem luxury consumption is for you. Increasing the gas tax has two advantages—it
penalizes big and wasteful SUVs, and also penalizes driving a lot; a disadvantage is
that it would disproportionately hurt the poor and middle class—the rich can afford it.
Taxing luxury consumption would probably be the best solution. We do not advocate
any of those solutions, but merely point out alternatives that could help people make
better informed decisions, i.e., decisions that lead to greater happiness.
Again, a key problem with any luxury consumption is that it makes other people
relatively deprived and results in consumption arms race (e.g., Frank 2012)—this is
the reason for ridiculously expensive luxury cars that are severalfold as expensive as
frugal cars without much substantive difference . For instance, both Toyota Corolla
and Lexus IS have little substantive (technical) difference,
27
they are even both
made by the same company, Toyota, which created the Lexus so that it appears
more exclusive and is not confused with the frugal Toyota , so that the price
27
Performance of Lexus may be 10–20 % better than Corolla’s, but fuel efficiency is worse and Lexus is
100 % more expensive. And much of the performance advantage is illusionary anyway—for instance,
140 mph vs 115 mph is meaningless because there are no public roads to drive at such speeds. Safety is
about the same. For comparisons, see for instance http://cars.findthebest.com/compare/766-1250/2012-
Lexus-IS-250-vs-2012-Toyota-Corolla-L and http://carsort.com/compare/Lexus-IS-vs-Toyota-Corolla.
Another example is a comparison of Toyota Highlander and Lexus RX—both being almost identical
technically, yet Lexus being more expensive by $10k—a price paid for being conspicuous or wasteful.
For comparisons see for instance http://www.autotrader.com/research/article/car-reviews/225342/2014-
toyota-highlander-vs-2014-lexus-rx-whats-the-difference.jsp.
Luxury car owners are not happier than frugal car owners 137
123
difference can be justified by buyin g a product that signifies that you are better than
others. Most of the difference between two cars is fashion: e.g., colors and shapes.
In short, as Veblen (2005a, b) observed a long time ago, such conspicuous
consumption is a waste.
Open Access This article is distributed under the terms of the Creative Commons Attribution License
which permits any use, distribution, and reproduction in any medium, provided the original author(s) and
the source are credited.
Appendix: Variable definitions and descriptive statistics
See Table 4 and Fig. 2.
Table 4 Variable definitions
Name Description
Happiness Please think about your life as a whole. How satisfied are you
with it? Are you completely satisfied, very satisfied,
somewhat satisfied, not very satisfied, or not at all satisfied?
Car price What was the total price of the vehicle?—FIRST VEHICLE
Own car If number of vehicles gt 0
Number of vehicles Altogether, how many vehicles do you (and your family living
there) own or lease (for your personal use)?
Total family income The income reported here was collected in 2011 about tax year
2010. Please note that this variable can contain negative
values. Negative values indicate a net loss, which in waves
prior to 1994 were bottom-coded at USD 1, as were zero
amounts. These losses occur as a result of business or farm
losses
Own a dwelling OR rent a dwelling
OR other than own/rent a
Do (you (or anyone else in your family living there)/they (or
anyone else in the family living there)) own the
(apartment/mobile home/home), pay rent, or what?
Number of children in household This variable represents the actual number of persons currently
in the FU who are neither Head nor Wife/‘‘Wife,’’ from
newborns through those 17 years of age, whether or not they
are actually children of the Head or Wife/‘‘Wife’’
Health Now I have a few questions about (your/HEAD’s) health.
Would you say (your/HEAD’s) health in general is excellent,
very good, good, fair, or poor?
Male Sex of head
Married Are you (HEAD) married, widowed, divorced, separated, or
have you never been married?
Age This variable represents the actual age of the 2011 Head of the
FU. The minimum value is usually 18, although in rare cases a
person under 18 might become Head. OR This variable
represents the actual age of the current Wife or ‘‘Wife’’
(cohabiting female friend). Wives/‘‘Wives’’ aged 14–16 are
rare
Year in which acquired first car In what year did you (buy/lease/receive/acquire) it?—FIRST
VEHICLE
138 A. Okulicz-Kozaryn et al.
123
1
2
3
4
5
6
7
8
9
10
0 1,000 2,000 3,000 4,000
Frequency
happiness
0
50000
100000
150000
0 1,000 2,000 3,000 4,000
Frequency
[categories classified into 5 bins]
car price
0
1
0 2,000 4,000 6,000 8,000
Frequency
own car
0
2
4
6
8
10
0 1,000 2,000 3,000 4,000
Frequency
[categories classified into 5 bins]
number of vehicles
0
500000
1000000
1500000
2000000
0 5,000 10,000
Frequency
[categories classified into 5 bins]
total family income
0
1
0 5,000
Frequency
own a dwelling
0
1
0 2,000 4,000 6,000
Frequency
rent a dwelling
0
1
0 2,000 4,000 6,000 8,000
Frequency
other than own/rent a dwelling
0
2
4
6
8
10
0 2,000 4,000
6,000
8,000
Frequency
[categories classified into 5 bins]
number of children in household
1
2
3
4
5
0 1,000 2,000 3,000
Frequency
health
0
1
0 2,000 4,000 6,000
Frequency
male
0
1
0 5,000
Frequency
married
20
40
60
80
100
0 1,000 2,000 3,000
Frequency
[
cate
g
ories classified into 5 bins
]
age
Fig. 2 Variables’ distribution
Luxury car owners are not happier than frugal car owners 139
123
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