Mood Management Dynamics: The Interrelationship between Consumer Mood and Behavior JAMES D. HESS

People actively attempt to create and maintain positive moods and to escape from negative moods by engaging in various consumption activities. The principle of homeostasis explains the essence of this mood-management behavior: that consumers adjust their mood and activities to preserve constant the conditions of life. We model the dynamics of consumer mood and mood-management behavior through a pair of interdependent, linear differential equations and estimate the equations using mood and consumption data collected from an adult consumer panel. Because empirically fitting continuous-time differential equations to intermittent observations is uncommon in the marketing literature, we show how to transform differential equations into equations that can be estimated using simultaneous equation regression methods. Our consumer panel shows strong homeostasis in mood management and no evidence of endogenous mood cycles.