IDEAS home Printed from https://ideas.repec.org/a/spr/ariqol/v17y2022i4d10.1007_s11482-021-10017-9.html
   My bibliography  Save this article

Income and Subjective Well-being: Test of a Multilevel Moderated Mediation Model

Author

Listed:
  • Fugui Li

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

  • Weiqi Mu

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

  • Siying Li

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

  • Xue Li

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

  • Jianxin Zhang

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

  • Chen Chen

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences
    City University of Hong Kong)

  • MingJie Zhou

    (Chinese Academy of Sciences
    University of Chinese Academy of Sciences)

Abstract

Is the Easterlin paradox lost, or has it been regained? Scholars have started to debate this topic in recent years. This paper explores the association between income and happiness in cities with different levels of economic development, which provides new evidence for the Easterlin paradox. 11,791 participants from 32 cities reported their absolute income (real income), relative income (subjective evaluation of their family’s economic status), and subjective well-being (SWB). We also obtained the total gross domestic product (GDP) of each city from the Urban Statistical Yearbook as an indicator of regional economic development level. We applied the MLmed macro in SPSS to test the multilevel moderated mediation model. The results show that individual absolute income has significant predictive effects on relative income and SWB, and that relative income play a mediating role on the association between absolute income and SWB. Moreover, GDP moderates the association between absolute income and SWB, and the association between absolute income and SWB is stronger in cities with higher GDP. In addition, GDP moderates the relationship between absolute income and relative income, and the relationship between absolute income and relative income is stronger in cities with lower GDP. Furthermore, GDP moderates the mediating effect between absolute income and SWB not only at the individual level but also at the city level. The insights gained in this study may facilitate a more detailed understanding of the relation between income and SWB, and provide advice for individuals and governments.

Suggested Citation

  • Fugui Li & Weiqi Mu & Siying Li & Xue Li & Jianxin Zhang & Chen Chen & MingJie Zhou, 2022. "Income and Subjective Well-being: Test of a Multilevel Moderated Mediation Model," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(4), pages 2041-2058, August.
    • Handle: RePEc:spr:ariqol:v:17:y:2022:i:4:d:10.1007_s11482-021-10017-9
    DOI: 10.1007/s11482-021-10017-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11482-021-10017-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11482-021-10017-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.
    2. Junhong Zhu & Changyong Liang & Jeffery Lucas & Wenjuan Cheng & Zhaoyang Zhao, 2020. "The Influence of Income and Social Capital on the Subjective Well-Being of Elderly Chinese People, Based on a Panel Survey," Sustainability, MDPI, vol. 12(11), pages 1-22, June.
    3. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    4. Robert Cummins, 2000. "Personal Income and Subjective Well-being: A Review," Journal of Happiness Studies, Springer, vol. 1(2), pages 133-158, June.
    5. Samuel M. Jung & Hyungju Edmond Cha, 2021. "Financial development and income inequality: evidence from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 26(1), pages 73-95, January.
    6. Bartolini, Stefano & Sarracino, Francesco, 2015. "The Dark Side of Chinese Growth: Declining Social Capital and Well-Being in Times of Economic Boom," World Development, Elsevier, vol. 74(C), pages 333-351.
    7. Xinwen Bai & Chiahuei Wu & Rui Zheng & Xiaopeng Ren, 2011. "The Psychometric Evaluation of the Satisfaction with Life Scale Using a Nationally Representative Sample of China," Journal of Happiness Studies, Springer, vol. 12(2), pages 183-197, April.
    8. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    9. Kaisa Kotakorpi & Jani‐Petri Laamanen, 2010. "Welfare State and Life Satisfaction: Evidence from Public Health Care," Economica, London School of Economics and Political Science, vol. 77(307), pages 565-583, July.
    10. Weiting Ng & Ed Diener, 2019. "Affluence and Subjective Well-Being: Does Income Inequality Moderate their Associations?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 14(1), pages 155-170, March.
    11. Hilke Brockmann & Jan Delhey & Christian Welzel & Hao Yuan, 2009. "The China Puzzle: Falling Happiness in a Rising Economy," Journal of Happiness Studies, Springer, vol. 10(4), pages 387-405, August.
    12. Easterlin, Richard A., 1974. "Does Economic Growth Improve the Human Lot? Some Empirical Evidence," MPRA Paper 111773, University Library of Munich, Germany.
    13. Takashi Oshio & Kayo Nozaki & Miki Kobayashi, 2011. "Relative Income and Happiness in Asia: Evidence from Nationwide Surveys in China, Japan, and Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 104(3), pages 351-367, December.
    14. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    15. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    16. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
    17. Alex Michalos, 2004. "Social Indicators Research and Health-Related Quality of Life Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 65(1), pages 27-72, January.
    18. Albert Keidel, 2009. "Chinese Regional Inequalities In Income And Well‐Being," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 538-561, July.
    19. Jichao Wang & Wei Yan & Jie Zhang, 2019. "Relative Income and Subjective Well-Being of Urban Residents in China," Journal of Family and Economic Issues, Springer, vol. 40(4), pages 673-680, December.
    20. Ed Diener & Ed Sandvik & Larry Seidlitz & Marissa Diener, 1993. "The relationship between income and subjective well-being: Relative or absolute?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 28(3), pages 195-223, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Byela Tibesigwa & Martine Visser & Brennan Hodkinson, 2016. "Effects of Objective and Subjective Income Comparisons on Subjective Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 361-389, August.
    2. Jorgensen, Bradley S. & Jamieson, Robert D. & Martin, John F., 2010. "Income, sense of community and subjective well-being: Combining economic and psychological variables," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 612-623, August.
    3. Hong, Yan-Zhen & Su, Yi-Ju & Chang, Hung-Hao, 2023. "Analyzing the relationship between income and life satisfaction of Forest farm households - a behavioral economics approach," Forest Policy and Economics, Elsevier, vol. 148(C).
    4. Stefano Bartolini & Ennio Bilancini & Francesco Sarracino, 2013. "Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(2), pages 169-191, November.
    5. Bogaerts, Tess & Pandelaere, Mario, 2013. "Less is more: Why some domains are more positional than others," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 225-236.
    6. Junhong Zhu & Changyong Liang & Jeffery Lucas & Wenjuan Cheng & Zhaoyang Zhao, 2020. "The Influence of Income and Social Capital on the Subjective Well-Being of Elderly Chinese People, Based on a Panel Survey," Sustainability, MDPI, vol. 12(11), pages 1-22, June.
    7. Elena Bárcena-Martín & Cortés Aguilar Alexandra & Ana I. Moro Egido, 2013. "The role of proximity and social comparisons on subjective well-being," ThE Papers 13/10, Department of Economic Theory and Economic History of the University of Granada..
    8. Shenghua Xie & Mia Hakovirta & Yunjiao Gao, 2020. "Perceptions of Household Income and Subjective Well-Being of Children in China," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 13(3), pages 1043-1064, June.
    9. Sebastian Neumann‐Böhme & Arthur E. Attema & Werner B. F. Brouwer & Job N. J. A. van Exel, 2021. "Life satisfaction: The role of domain‐specific reference points," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2766-2779, November.
    10. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    11. Akay, Alpaslan & Martinsson, Peter, 2011. "Does relative income matter for the very poor? Evidence from rural Ethiopia," Economics Letters, Elsevier, vol. 110(3), pages 213-215, March.
    12. Drakopoulos, Stavros, 2011. "Hierarchical Needs, Income Comparisons and Happiness Levels," MPRA Paper 48343, University Library of Munich, Germany.
    13. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével [Examining the relation of utility and relative income using Hungarian data]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    14. Caporale, Guglielmo Maria & Georgellis, Yannis & Tsitsianis, Nicholas & Yin, Ya Ping, 2009. "Income and happiness across Europe: Do reference values matter?," Journal of Economic Psychology, Elsevier, vol. 30(1), pages 42-51, February.
    15. Jaikumar, Saravana & Singh, Ramendra & Sarin, Ankur, 2018. "‘I show off, so I am well off’: Subjective economic well-being and conspicuous consumption in an emerging economy," Journal of Business Research, Elsevier, vol. 86(C), pages 386-393.
    16. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
    17. Bookwalter, Jeffrey & Fitch-Fleischmann, Benjamin & Dalenberg, Douglas, 2011. "Understanding life-satisfaction changes in post-apartheid South Africa," MPRA Paper 34579, University Library of Munich, Germany.
    18. Konow, James & Earley, Joseph, 2008. "The Hedonistic Paradox: Is homo economicus happier," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 1-33, February.
    19. Vinod Mishra & Ingrid Nielsen & Russell Smyth, 2014. "How Does Relative Income and Variations in Short-Run Wellbeing Affect Wellbeing in the Long Run? Empirical Evidence From China’s Korean Minority," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(1), pages 67-91, January.
    20. Benjamin Schalembier, 2016. "The Impact of Exposure to Other Countries on Life Satisfaction: An International Application of the Relative Income Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 221-239, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ariqol:v:17:y:2022:i:4:d:10.1007_s11482-021-10017-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.