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Is Happiness Adaptation to Poverty Limited? The Role of Reference Income

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  • Jianbo Jeff Luo

    (University at Buffalo, The State University of New York)

Abstract

This paper analyzes how people’s subjective well-being adapts to income poverty in Switzerland and Germany and presents two empirical findings. First, financial satisfaction (FS) does not adapt in either country. However, life satisfaction fully adapts in Switzerland but not in Germany. Second, people in income poverty have income lower than their reference income. In the long run, those who remain in income poverty are trapped in the situation of insufficient income. Therefore, FS has limited, if any, adaptation.

Suggested Citation

  • Jianbo Jeff Luo, 2022. "Is Happiness Adaptation to Poverty Limited? The Role of Reference Income," Journal of Happiness Studies, Springer, vol. 23(6), pages 2491-2516, August.
    • Handle: RePEc:spr:jhappi:v:23:y:2022:i:6:d:10.1007_s10902-022-00508-3
    DOI: 10.1007/s10902-022-00508-3
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    Cited by:

    1. Luo, Jianbo Jeff, 2022. "Occupational licensing and job satisfaction: Evidence from US data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).

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    More about this item

    Keywords

    Income poverty; Subjective well-being; Adaptation; Reference income; Minimum required income;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • D1 - Microeconomics - - Household Behavior

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