Personality and Individual Dierences 37 (2004) 905915

www.elsevier.com/locate/paid

Endowment and contrast: the role of positive and

negative emotions on well-being appraisal
Sheung-Tak Cheng

Department of Applied Social Studies, City University of Hong Kong, 83 Tat Chee Avenue, Kowloon, Hong Kong
Received 29 April 2003; accepted 24 October 2003
Available online 11 December 2003

Abstract
Linear additive models of aect and subjective well-being do not account for why people can uphold
their sense of well-being during adversity. This paper presents a multiplicative modelthe Aective
Endowment-Contrast Theory, and reports a prospective study testing the theory. Endowment means that
the accumulation of positive (PA) and negative aect (NA) has direct eects on well-being. Contrast,
represented by the product term PA NA, means that the eect of PA is stronger when NA is high than
when NA is low. The eect of contrast thus partly compensates the main eect of NA during dicult times.
Seventy-one university students completed aect diaries over a 4-week period. The results provided support
for the well-being repair function of contrast.

2003 Elsevier Ltd. All rights reserved.
Keywords: Happiness; Life satisfaction; Well-being; Aect; Endowment; Contrast

1. Introduction
The aect balance model (Bradburn, 1969) assumes that subjective well-being (SWB) is a
function of the dierence between positive aect (PA) and negative aect (NA). It assumes that
PA and NA contribute linearly and independently to SWB. This paper proposes a theory that
extends the aect balance model to take into account the positive function of NA. Before I go on
to talk about the theory, a clarication of terminology is necessary.
The meaning of the term SWB is ambiguous in the literature. Sometimes, it is used to mean PA
minus NA (Bradburn, 1969), sometimes life satisfaction alone (Neugarten, Havighurst, & Tobin,
*

Tel.: +852-2788-8745; fax: +852-2788-8960.

E-mail address: tak.cheng@cityu.edu.hk (S.-T. Cheng).

0191-8869/$ - see front matter
2003 Elsevier Ltd. All rights reserved.
doi:10.1016/j.paid.2003.10.013

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S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

1961), sometimes a combination of life satisfaction, PA and (lack of) NA (Diener, 2000; Lu et al.,
2001), and sometimes broadened to include other positive cognitions, vigor and mental alertness
(Hills & Argyle, 2002; Rysamb, Harris, Magnus, Vitters, & Tambs, 2002). In this paper, I use
the term well-being appraisal (WBA) to refer to an overall evaluation of life as a whole. Questions
pertaining to global happiness and satisfaction (Andrews & Withey, 1976; Campbell, Converse, &
Rodgers, 1976; Cantril, 1965; Diener, Emmons, Larsen, & Grin, 1985) fall into this domain.
1.1. Limitations of a linear model of aect and well-being appraisal
What is most remarkable about human beings is our ability to adapt under the most dicult
circumstances (Seligman & Csikszentmihalyi, 2000). In this connection, a linear additive model
that is commonly assumed in the eld may be too simplistic. Such a model does not explain why
individuals undergoing hardship can still maintain a reasonably high sense of well-being (e.g.,
Brickman, Coates, & Jano-Bulman, 1978; Miller, Manne, Taylor, & Keates, 1996).
Two psychological processes were suggested by Tversky and Grin (1991) to explain the
relationship between events and well-being (see also Schwarz & Strack, 2000). According to
Tversky and Grin, the same event has both an endowment and a contrast eect on well-being.
As for endowment, a positive event raises ones well-being over the long haul, and a negative event
reduces it. As for contrast, an earlier positive event reduces ones well-being due to the diminished
utility of subsequent events, whereas an earlier negative event raises it.
In one of the experiments reported in Tversky and Grin (1991), university students read
stories told by ctitious high school students. Two stories were provided, one about an event that
had happened the week before, the other happened on the day of storytelling. The past event
varied in terms of valence, whereas the present event, xed neutral, varied in terms of whether it
was related to the former or not, thus creating a 2 (valence of past event) 2 (relatedness of the
two events) between subjects design. They were asked to rate the happiness of the ctitious person
on an 11-point scale. Results showed (a) a signicant main eect for valence, meaning that the
happiness rating was lower when the past event was negative than when it was positive, and vice
versa (endowment eect), and (b) a signicant interaction eect for valence relatedness, meaning
that a related negative event in the past produced higher happiness ratings, whereas a related
positive event produced lower ratings (contrast eect). Tversky and Grin (1991) further argued
that other experiments designed to show moods eect on WBA through mood-induction procedures could be interpreted within this endowment-contrast framework.
Hence, endowment and contrast work in opposite directions, and while the aect balance
model takes well into account the endowment eects, it ignores the possibility of contrasts. If the
eect of a present event depends partially on its relation to past events, independent of its valence,
then well-being cannot be represented by a simple subtraction equation. Suppose persons A and B
each faces the same current events with the same outcomes. Suppose also that both had prior
experiences with these events. Person As past experiences were largely negative, whereas person
Bs were largely positive or neutral. According to the aect balance equation, everything else being
the same, person B is predicted to have a higher sense of well-being than person A. However,
according to the endowment-contrast paradigm, person B is not necessarily better o. If person
Bs prior experiences were largely positive, which one currently enjoys higher well-being depends
on the relative size of the endowment eect (in person Bs case) and the contrast eect (in person

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907

As case). If person Bs prior experiences were largely neutral, then he/she is predicted to have a
lower sense of well-being because of the contrast eect augmenting present well-being in person A.
The presence of contrast eect has far-reaching implications for a psychology of well-being
suering can enhance happiness.
One point requires clarication. Does contrast simply change the way we experience things, or
does it also change the way judgments of well-being are made? There is no doubt that an earlier
event would aect our experience with subsequent events, but this contrast eect would have been
absorbed into, and hence completely redundant with, the endowment eects of all subsequent
events. What Tversky and Grin have shown is that contrast has an evaluative function with
regards to overall well-being as well as an experiential function. It is this evaluative function that
is the focus of this article.
1.2. The aective endowment-contrast theory
Despite Tversky and Grins perceptive analysis, their framework has received very little
attention in the literature. Data concerning the theory are limited to those obtained under
experimental conditions in which participants were drawn to attend to the dierence between two
events, whereas naturalistic research is absent to the authors knowledge. Can these laboratory
ndings be generalized to real life? Do people spontaneously engage in contrast in daily life? It
should be noted that in naturalistic research, endowment and contrast eects in the same event are
dicult to disentangle, since the eects of all events are mixed up together in ones WBA.
Nonetheless, the notions of endowment and contrast can be extended to naturalistic research
with a theoretical twist. Since all events are coded in aective tone (Zajonc, 1980), the theory can
be reformulated as follows: PA and NA have endowment and contrast eects on well-being. In
this revised theory, the endowment eect means that the accumulation of PA and NA have direct
impact on well-being. The contrast eect is predicated on the assumption that our total aective
experience is larger than the sum of positive, negative and neutral moments. This means that the mix
of PA and NA gives meaning to our quality of life that is beyond a simple aect balance equation.
A powerful example is that a person whose PA and NA each occupies 50% of the time will
probably report very dierent well-being than someone who spends 50% of the time in neutrality
and the rest in equal amounts of PA and NA, even though their aect balance scores are the same.
In periods when PA is prevalent and NA is rare, we tend to feel good. But when NA is prevalent, a
modest amount of PA may be enough to restore us to a minimal sense of well-being, even though
there may be less PA than NA. In fact, the contrast eect at hard times can oset the endowment
eect of NA, thus helping to maintain our sense of well-being despite adversity. Finally, when
both PA and NA are infrequent, life may become so uninteresting that ill-being would result, even
though PA and NA are equally prevalent.
What distinguishes this theory from the aect balance approach is that PAs eect on WBA is
hypothesized to depend on the level of NA. It therefore species a multiplicative rather than a
linear model. That is, the same amount of change in PA should result in more changes in WBA
when NA is high than when NA is low. Because NA is typically low in our daily lives (Watson,
Wiese, Vaidya, & Tellegen, 1999), another way of saying this is: A positive experience which has
little or no eect ordinarily would go a long way at hard times. On the contrary, when life is
smooth, the eect of adding more positive experiences may just be marginal.

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S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

Given the theorys aective loading, I have named it the aective endowment-contrast theory. Statistically, endowment can be tested as main eects, and contrast as interaction eects in a
multiple regression. Specically, endowment eects predict a positive and signicant regression
coecient for PA, and a negative and signicant regression coecient for NA. As for the
contrast eect, an interaction term created by multiplying PA by NA should be signicant after
controlling for the main eects, and the direction of association should be positive, meaning that
well-being is higher when both PA and NA are frequent, and lower when both are infrequent.
The theory can thus be written as follows: WBA (PA ) NA) + (PA NA). It can be seen from
this formula that when the value of either PA or NA is small, the contrast term is negligible and
WBA becomes primarily a function of endowment. However, when both PA and NA are high,
the contrast eect will act to compensate for NAs endowment, theoretically by augmenting the
eect of PA.
This theory diers from Tversky and Grins in three fundamental ways. First, whereas for
Tversky and Grin the object of analysis is the event, in the new theory it is the aective response
to the event. More importantly, aect is treated as a currency to experiences as money is a currency to commodities. The PA generated from dierent experiences is seen as qualitatively the
same but quantitatively dierent, same for NA.
Second, whereas in Tversky and Grins analysis the standard for comparison is always events
in the past, in the new theory it can be both present and past events. For instance, a negative
current event may help one re-appreciate past fortunes, and as a result enhances the overall sense
of well-being. The renowned Archbishop Tutu, recently commenting on his cancerous state, said
that the terminal cancer helped him rediscover the various nice things in life, including the wifes
love, Beethovens music, roses dew, and grandchildrens smiles (Apple Daily, April 16, 2001). In a
special feature program, New York City Firemen (TVB Pearl, November 24, 2001), a reman
recounted, after 911, how happy it was to come to work everyday (before the incident) (italics
mine). In fact, events like the 911 provide a standard against which both past and future events are
compared. Hence, no assumption is made concerning the direction of comparison.
Third, for Tversky and Grin contrast can lower or raise well-being. In the new theory,
contrast is biased toward raising well-being. There are three reasons for this view: (a) it is closer
to commonsense observations, (b) it ts a broad social psychological literature on positive bias
(e.g., Taylor & Brown, 1988), and (c) it allows specication of statistical models for testing.
Although in reality both positive and negative contrasts exist (see Brickman et al., 1978), the net
contrast eect is hypothesized to be positive. If the net contrast eect is allowed to go either way,
any nding concerning the interaction term (e.g., signicant or nonsignicant, positive or negative) would be consistent with the theory, and hence no sensible interpretation of the data is
possible.
This study is an empirical test of the aective endowment-contrast theory based on the diary
reports of aect of university students.

2. Method
Seventy-ve undergraduates were recruited to ll out aect diaries over a 4-week interval for a
nominal pay. At the conclusion of the 4-week period, they provided rating on the Well-being

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909

Appraisal Index (see below). 1 Four participants failed to complete the study, leaving 71 participants (17 males and 54 females; mean age 22.0, SD 1.40) for the data analysis.
The diaries were as follows. Twice each day the participants rated their aect in the past hour
by lling out the Chinese Aect Scale which contains 10 PA and 10 NA items (Hamid & Cheng,
1996). The PA adjectives are: content, exuberant, excited, agreeable, happy, meaningful, joyful,
comfortable, relaxed, and peaceful, whereas the NA adjectives are: sad, helpless, frightened,
disappointed, bitter, tense, insecure, exhausted, annoyed, and depressed. The questions were
printed in four booklets, one for each week, to be carried by the participants. Each aect was
rated on a 5-point scale from 1 none or little to 5 a lot. A time for responding, either on the hour
or on the half-hour, was randomly sampled from each of the following time zones each day
11:0016:30 and 17:3022:00 hin order to take into account the circadian rhythm of mood
(Caminada & de Bruijn, 1992; Watson et al., 1999) and the daily routines of the students (classes
in morning and afternoon, and social activities/studying in the evening). Data collection always
started on a Monday for any participant and the completed booklets were returned on either the
Monday or the Tuesday of the following week, depending on traveling schedules. All participants
received a call during the rst week of data collection to make sure that they had no problems
following the procedure. The outcome of this phone call as well as subsequent dialogues when the
weekly booklets were returned suggested that the procedure was followed rigorously.
One week after the data collection was over, participants were phoned and were asked to rate
themselves on the Well-being Appraisal Index. Much like the ones used by Campbell et al. (1976)
and Strack, Schwarz, and Gschneidinger (1985), the Index is a composite of two questions: All
things considered, do you live in happiness? and All things considered, are you satised with
your life? Both questions were answered on a 7-point scale, from 1 very unhappy/dissatised to
7 very happy/satised, with 4 being mixed. Participants were not given prior notice of this
interview so that they would not link their diaries to another anticipated assessment. The 1-week
interval was set so that participants would not have a fresh memory of the information they had
provided in the diaries, and thus avoided correlational ination between WBA and aect. In a
pilot study of 104 university students, this Index had an average correlation of 0.82 with the
Satisfaction with Life Scale (Diener et al., 1985) over three administrations, and had 1-week, 2week and 3-week retest correlations of 0.82, 0.77 and 0.75 respectively. The Cronbachs alpha in
the present sample was 0.84.
Three measures were generated from the aect diaries over the 4-week period: (a) average PA
over four weeks, (b) average NA over four weeks, and (c) aect balance, by subtracting NA from
PA. The measure of WBA was the average score of the two constituent items of the Index. A
higher score always meant a stronger tendency of what the construct was intended to measure.
In addition, the diary aect ratings were split into two halves so as to create sequential variables
for PA and NA. Specically, ratings of the rst two weeks were aggregated and averaged to form

Originally, the study also examined the moderating role of optimism (Scheier & Carver, 1992) on the contrast-WBA
relationship; that is, it was hypothesized that the contrast eect on WBA would be higher for more optimistic than for
less optimistic people. This moderating relationship was not supported. Moreover, the endowment and contrast eects
of aect on WBA were not changed whether optimism was included or not. Thus optimism was subsequently removed
from the analysis so that the eects of aect on WBA would be more fully revealed.

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S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

time 1 measures for PA and NA, and those of the nal two weeks formed time 2 measures of PA
and NA. This allowed further probing of the specic nature of the contrast eect, as elaborated
below.
3. Results
3.1. Descriptive statistics
Descriptive statistics for the variables are displayed in Table 1. One notable pattern evidenced
in Table 1 was the relative infrequency of NA compared with PA, and this was consistent with the
observations of Watson et al. (1999). Because of this, the average aect balance score was in the
positive range.
3.2. Intercorrelations of the variables
The intercorrelations of the variables are presented in Table 2. As a principle, the correlations
between the total and its components are not shown.
From Table 2, one can see that PA and NA evidenced high stability over time, as shown by the
correlations between the time 1 and the time 2 measures. Such stability is consistent with the
observation that peoples lives do not normally change drastically over short periods, and this is
especially so with students.
Table 1
Descriptive statistics
WBA
Mean
SD

4.87
1.09

PA

NA

AB

T1

T2

Total

T1

T2

Total

2.36
0.48

2.17
0.47

2.27
0.45

1.70
0.49

1.73
0.51

1.72
0.48

0.55
0.71

Note: WBA well-being appraisal, AB aect balance; T1 weeks 12, T2 weeks 34.

Table 2
Intercorrelations
WBA (1)
2
3
4
5
6
7
8

0.74
0.70
0.75
)0.45
)0.36
)0.42
0.76

PA

NA

AB (8)

T1 (2)

T2 (3)

Total (4)

T1 (5)

T2 (6)

Total (7)

0.85

)0.19
)0.14

)0.12
)0.12

)0.15

0.86

Note: WBA well-being appraisal, AB aect balance; T1 weeks 12, T2 weeks 34. Correlations at or above 0.19
were signicant at the 0.05 level, one-tailed. () not shown.

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911

Consistent with a two-factor model of aect (Watson et al., 1999), PA and NA, whether
aggregated over two or four weeks, had weak correlations with each other. Furthermore, PA was
more strongly related to WBA than NA. Moreover, using 4-week aggregated scores, aect balance
and PA had almost the same correlation with WBA. Thus, using PA alone to predict WBA would
be as good as a measure that incorporates both PA and NA, as far as linear prediction is concerned.
3.3. Multiple regression
Well-being appraisal was regressed on PA and NA (aggregated over four weeks), followed by
their product term (for assessing interaction eects). To reduce the problem of multicollinearity,
PA and NA were standardized before forming the product term (Aiken & West, 1991). The results
are shown in Table 3.
One can see that PA and NA together accounted for a massive 64% of the variance in WBA,
with PAs eect stronger than NAs. Furthermore, the regression coecient for the interaction
term was positive and signicant, adding another 2.1% to the explained variance of WBA. This
indicated that after controlling for the main eects of PA and NA, WBA was higher for those
whose PA and NA were both high. Fig. 1 shows the nature of the interaction, by plotting the
relationship between PA and WBA for high (those above median) and low (those below median)
NA participants.
It can be seen from Fig. 1 that PA had a stronger eect on WBA when NA was high than when
NA was low. This pattern of results is consistent with the contrast hypothesis but not with the
aect balance model. Although those high in NA never caught up with those low in NA in
WBA scores, they were able to enjoy a reasonably high sense of well-being with just a moderate
level of PA.
The nature of the contrast eect was further probed by forming four interaction terms between
the biweekly measures of PA and NA (see Table 4). According to the theory, all product terms
should be signicant because contrasts occur regardless of the serial order of NA and PA. Although the theory postulates that contrast is biased toward raising well-being, it does not mean
that all product terms have to have a positive eect on WBA as long as the net contrast eect is
positive. This can be examined by looking at the relative eect sizes (i.e., contribution to R2 ) of the
product terms bearing a positive eect versus those bearing a negative eect. In order to reduce
the problem of multicollinearity among the variables and to maintain reasonable statistical power

Table 3
Hierarchical regression of well-being appraisal on aect aggregated over four weeks
Standardized regression coecients
NA
PA
NA PA
Adjusted R2
a

P < 0:001.
b
P < 0:05.

Step 1

Step 2

)0.32
0.69a

)0.27a
0.69a
0.13b

0.644

0.665

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S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

7

Well-being Appraisal Index

Lo NA
4

Hi NA

PA

Fig. 1. Relationship between PA and well-being appraisal in high (above median) and low (below median) NA conditions.

Table 4
Specic contrast eects over time: four regression models on well-being appraisal
Predictors

Standardized regression coecients by model

1

1.
2.
3.
4.
5.
6.
7.
8.

T1NA
T1PA
T2NA
T2PA
T1NA T1PA
T1NA T2PA
T1PA T2NA
T2NA T2PA

Contribution to adjusted R2 by
product term

)0.28
0.68b

0.08

)0.30

0.66b

0.13

0.70b
)0.25a

0.14c

)0.27a
0.66b

0.19a

0.004

0.015

0.022

0.049

Note: T1 weeks 12, T2 weeks 34. () irrelevant for the specic model.
a
P < 0:01.
b
P < 0:001.
c
P < 0:05.

given the sample size, the four product terms were each tested in a separate regression model. All
product terms were formed using standardized constituent variables.
It can be seen from Table 4 that all product terms had positive eects on WBA, and two of
which were statistically signicant. This pattern of results lends further support to the theorys

S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

913

premise that aective contrast tends to enhance well-being and has the eect of compensating the
negative main eect of NA. Both signicant terms involved time-2 NA as a basis for contrast with
either concurrent or restrospective PA. The term time-1 NA time-2 PA, which on the surface is
most suggestive of the contrast eect, was only marginally signicant (P 0:057). It seems that
contrast is most likely activated by recent negative experiences, which prompts the search for
positive experiences in the present or the recent past so as to repair damage to the sense of wellbeing.

4. Discussion
The ndings showed that the well-being enhancement eect of PA was stronger when NA was
high than when NA was lowsomething that was not predicted by the aect balance model but
was well-predicted by the aective endowment-contrast theory. A nding that was not accounted
for by the theory was the disparate endowment eects of PA and NA, and this was not entirely
unexpected from the literature (Lucas, Diener, & Suh, 1996). Overall, NA had a relatively small
endowment on WBA, and this makes the contrast eect especially interesting because one does
not need a large contrast to compensate for the negative endowment.
The small endowment eect of NA, as well as the contrast eect, implies that WBA scores
should be negatively skewed in the general population. Because the main purpose of contrast is to
restore our sense of well-being in the face of adversities, it belongs to a class of regulatory
strategies that Heckhausen and Schulz (1995) called secondary control. Future research
employing cross-cultural samples will reveal if the contrast eect is generalizable across cultures.
Further analysis of contrasts across time revealed that all contrasts between NA and PA tended
to have a positive eect on WBA, and that contrast is most readily activated by recent negative
experiences. However, such a conclusion should be regarded as tentative, given the small sample
size, the nature of the sample (i.e., university students), and the time frame and the intercorrelations of the measures. We have seen that time-1 NA time-2 PA reached marginal signicance;
hence more distant negative experiences might also carry contrast eects. For example, if the
study was to focus on a special sample (e.g., recovered cancer patients), and the period of study
was to span from the beginning of treatment to a year into remission, this more distant (negative)
experience which probably leaves a permanent mark in ones life would still form a basis for
contrast.
Moreover, as the measures of PA were highly correlated between time 1 and time 2, same for
NA, there was a fair degree of redundancy among the four regression models in Table 4. Indeed,
ignoring the issue of statistical power for the moment, when the four biweekly measures of aect
were entered as a block in a hierarchical regression, followed by the four product terms entered on
a stepwise basis, only T2NA T2PA met the criterion for entry, adding 2.1% of explained variance to the equation (cf. Table 3). On hindsight, had the study focused on just the last two weeks
of the diary period, the size of the contrast eect found would have been much larger (from 2.1%
to 4.9%; see Tables 3 and 4).
Notwithstanding the limitations, the results suggest that WBA is highly dependent on PA and
less on NA. Moreover, NA also serves as a basis against which PA is evaluated so that the eect of
PA on WBA is further augmented. This positive bias in the way we use positive and negative

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S.-T. Cheng / Personality and Individual Dierences 37 (2004) 905915

experiences may be related to another bias that has been reported in the literature, namely our
time perspective regarding positive and negative events. People commonly believe that positive
events tend to recur whereas negative events tend not to (Pyszczynski, Holt, & Greenberg, 1987).
It is therefore easy for us to regard positive events as more representative of our current state of
aairs than negative events. According to Schwarz and Strack (2000), this should enhance the
likelihood of positive events being assimilated into our sense of well-being, and negative events
serving as the standard for comparison. In this connection, it is interesting to note that depressed
people believe negative events to be equally likely, if not more likely, as positive events (Peterson
& Seligman, 1984; Pyszczynski et al., 1987). People who are depressed might have temporarily lost
this ability to repair well-being.
There is a reason why the contrast function is carried by NA rather than PA. Watson et al.
(1999) observed that NA is characteristically low over time but becomes highly elevated in
problematic situations, leading to a positively skewed and leptokurtic distribution within an
individual. Hence when NA is noticeably increased, something must be wrong and our coping
mechanism is called upon to deal with its impact on well-being. However, low PA is not necessarily associated with crisis (e.g., we may work intensively for hours and days to get something
done, during which there is very little experience of PA) and hence it bears no clear-cut relationship with contrast.
A nal caveat is warranted before coming to a close. It should not be mistaken that happiness is
best achieved by subjecting oneself to suering. The available data from Table 3 indicate that PA
and NAs combined endowment eect is much larger than the eect of their contrast. Thus, it is
highly unlikely that one can nd happiness when PA is low. However, as the size of the contrast
term is in direct proportion to the amount of NA, future studies employing populations with more
intensive negative experiences (e.g., life-threatening illnesses) might reveal a larger contrast eect
on well-being. In any case, the data suggest that positive experiences are more valued when life is
rough than when it is easy.
Acknowledgements
I am grateful to Jacky Cheung and two anonymous reviewers for their helpful comments on an
earlier version of the manuscript.

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