A Longitudinal Examination of the Relationship Between National-Level Per Capita Advertising Expenditure and National-Level Life Satisfaction Across 76 Countries

Advertising theory offers competing perspectives on how advertising might affect life satisfaction. For instance, advertising may have some negative effects by increasing materialism, or it may have some positive effects by reducing marketplace uncertainty. Yet research investigating these connections remains limited. We compile a data set of per capita advertising expenditure to investigate advertising's relationship with life satisfaction within 76 countries from 2006 to 2019. We deal with several sources of endogeneity and account for other determinants of life satisfaction (e.g., gross domestic product (GDP) per capita, social support) in our analysis. Results from a within country fixed-effect model indicate that per capita advertising expenditure is positively related to national average life satisfaction. Moderation analyses of this aggregate secondary data and two individual-level experiments provide mechanistic evidence that this occurs because of advertising's ability to reduce marketplace uncertainty. However, supplemental analyses and an additional experiment indicate that this positive relationship is attenuated through a materialism pathway in certain situations (e.g., related to cultural, income, and subjective inequality factors) and can become negative. As such, we provide the first nuanced and multifaceted view of advertising's complex relationship with life satisfaction in the marketing literature.

Automated summary

The impact of advertising on life satisfaction is complex, with both positive effects such as reducing marketplace uncertainty and negative effects such as promoting materialism. This study analyzes data from 76 countries and finds a positive correlation between per capita advertising expenditure and national average life satisfaction. It also provides mechanistic evidence that advertising can enhance life satisfaction by reducing marketplace uncertainty. However, the relationship can be attenuated and even become negative in certain situations influenced by cultural, income, and subjective inequality factors.