Abstract
Thesia Garner, Linda Stinson, and Stephanie Shipp
(1996) "Affordability, Income Adequacy, and Subjective
Assessments of Economic Well-Being: Preliminary Findings," Association
for Consumer Research Conference, Tucson, Arizona.
Affordability and income adequacy perceptions are
subjective assessments of one's or one's family's economic
well-being, and thus can be considered psychological
manifestations of some underlying economic variable. Both
concepts deal with economic means to purchase or achieve some
goal, given a budget constraint and beliefs about one's
budget constraint. Thus affordability and income adequacy can
serve as links in economic-socio-psychology models of
attitude-intention behavior (see van Raaij 1996) . While
affordability generally can be defined as the ability to
purchase some commodity or to achieve some particular level
of living, income adequacy is likely to reflect one's ability
to met some basic need or reflects some belief about some
basic income or other resource necessary to achieve a
particular level of living. Whether someone thinks his/her
household's income is adequate to meet basic needs, for
example, is another way of saying that the individual thinks
the household can afford to meet these needs. Within the
choice set, the individual will make decisions about what the
goal is, the quantity to purchase, and the quality.
Affordability and income adequacy are different from
willingness to pay or to buy; with willingness the issue is
if the individual wants to make the purchase, for example,
not if he/she has the means or thinks he/she has. If the
individual thinks he/she can afford some commodity or has
adequate income to purchase some commodity, then we assume
that his/her economic well-being is higher than the economic
well-being of someone who cannot afford or does not have
adequate income to make the purchase.
Subjective assessments of economic well-being and income, in
particular, are not new constructs of interest in social
analysis. As early as 1881, economists recognized that the
utility or economic well-being gained from any given
commodity was not always independent of the consumption of
other goods. For example, the value of butter may be
dependent upon one's ownership of bread. Likewise, the value
of a right shoe may be dependent upon one's ownership of the
matching left shoe. Along the same vein, the value of one's
income may, in fact, be tempered by the amount of one's
expenses or by the particular configuration of commodities
that one already owns. For example, a very small income may
be adequate if one already has a home that is paid-off or a
garden in which to grow food.
Last Modified Date: July 19, 2008
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