The Role of Emotion in Consumption

Jan P Voon


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.

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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