The Perceived Economic Scarcity Scale: A valid tool with greater predictive utility than income

This article introduces the Perceived Economic Scarcity Scale (PESS), a novel instrument measuring the subjective evaluation and experience of economic scarcity (the feeling of having insufficient financial resources to meet one's needs). We conducted three high-powered preregistered studies (total N = 1900) to rigorously evaluate the PESS's psychometric properties. In Study 1, we generated a pool of items and used both Principal Component Analysis and Exploratory Factor Analysis to select the most appropriate items. In Study 2, we examined the PESS's construct validity, demonstrating that it measures a distinct construct from related constructs such as subjective social class. In Study 3, we examined the PESS's predictive validity, demonstrating that it is a robust predictor of both affective outcomes (e.g. anxiety-depressive symptoms) and cognitive outcomes (e.g. economic risk-taking). Critically, we found that the PESS not only has incremental validity over and above income but also has greater predictive utility than income. We also found that the PESS score varies depending on the distance-to-pay and has excellent test-retest reliability. Overall, the PESS appears to be a valid and reliable instrument for assessing perceived economic scarcity, and we encourage researchers to use it to better understand the psychological consequences of 'not having enough'.

The empirical relationship between nonstandard economic behaviors

We study the joint distribution of 11 behavioral phenomena in a group of 190 laboratory subjects and compare it to the predictions of existing models as a step in the development of a parsimonious, general model of economic choice. We find strong correlations between most measures of risk and time preference, between compound lottery and ambiguity aversion, and between loss aversion and the endowment effect. Our results support some, but not all attempts to unify behavioral economic phenomena. Overconfidence and gender are also predictive of some behavioral characteristics.