The Relationship Between Luxury Consumption and Happiness, How Personality Traits Influence This Relationship, A Case Study in The Netherlands

This study aims to re-examine the relationship between luxury consumption, specifically luxury vehicle ownership, and happiness. It also discusses the influence of personality traits on this relationship. In exploring the relationship between luxury vehicle ownership and happiness, this study looks deeply into the aspects of luxury vehicle consumption that are correlated with happiness. These aspects are vehicle ownership, vehicle price and luxury vehicle ownership. Indeed, according to the literature, luxury vehicle ownership is ownership of the most expensive vehicle. To differentiate with the previous study, this study offers a new perspective in exploring the relationship between the consumption of a luxury vehicle and happiness using the big five personality traits, without ignoring the impact of income and personal characteristics. This study uses the LISS (Longitudinal Internet Studies for The Social Sciences) panel data, which contains happiness-related information from individuals who reside in the Netherlands. The OLS model is used to explore variations in happiness determinants and their effects on happiness. This study argues that luxury vehicles ownership can bring happiness. Furthermore, this study also argues that big five personality traits can moderate this relationship, whereby they have the capacity to influence the evaluation of luxury consumption, both ex ante and ex post. Nevertheless, this study tests only the relationship between luxury vehicle ownership and happiness, personality traits and happiness, and the moderating effect of big five personality traits on the relationship between luxury vehicle ownership and happiness. The mechanisms that work behind those relationships are not tested in this study. Results show that, luxury vehicles ownership increases happiness. However, there is not enough evidence to conclude that the big five personality traits can explain the variation of happiness levels reported by luxury vehicles owners.