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Why does Income Relate to Depressive Symptoms? Testing the Income Rank Hypothesis Longitudinally

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  • Hilda Osafo Hounkpatin
  • Alex Wood
  • Gordon Brown
  • Graham Dunn

Abstract

This paper reports a test of the relative income rank hypothesis of depression, according to which it is the rank position of an individual’s income amongst a comparison group, rather than the individual’s absolute income, that will be associated with depressive symptoms. A new methodology is developed to test between psychosocial and material explanations of why income relates to well-being. This method was used to test the income rank hypothesis as applied to depressive symptoms. We used data from a cohort of 10,317 individuals living in Wisconsin who completed surveys in 1992 and 2003. The utility assumed to arise from income was represented with a constant relative risk aversion function to overcome limitations of previous work in which inadequate specification of the relationship between absolute income and well-being may have inappropriately favoured relative income specifications. We compared models in which current and future depressive symptoms were predicted from: (a) income utility alone, (b) income rank alone, (c) the transformed difference between the individual’s income and the mean income of a comparison group and (d) income utility, income rank and distance from the mean jointly. Model comparison overcomes problems involving multi-collinearity amongst the predictors. A rank-only model was consistently supported. Similar results were obtained for the association between depressive symptoms and wealth and rank of wealth in a cohort of 32,900 British individuals who completed surveys in 2002 and 2008. We conclude that it is the rank of a person’s income or wealth within a social comparison group, rather than income or wealth themselves or their deviations from the mean within a reference group, that is more strongly associated with depressive symptoms. Copyright The Author(s) 2015

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  • Hilda Osafo Hounkpatin & Alex Wood & Gordon Brown & Graham Dunn, 2015. "Why does Income Relate to Depressive Symptoms? Testing the Income Rank Hypothesis Longitudinally," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(2), pages 637-655, November.
  • Handle: RePEc:spr:soinre:v:124:y:2015:i:2:p:637-655
    DOI: 10.1007/s11205-014-0795-3
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    Cited by:

    1. Jens Hoebel & Ulrike E Maske & Hajo Zeeb & Thomas Lampert, 2017. "Social Inequalities and Depressive Symptoms in Adults: The Role of Objective and Subjective Socioeconomic Status," PLOS ONE, Public Library of Science, vol. 12(1), pages 1-18, January.
    2. Shen, Zheng & Fang, Xiangming & Zheng, Xiaodong, 2022. "The impact of women's off-farm employment on depressive symptoms: Evidence from rural China," Social Science & Medicine, Elsevier, vol. 311(C).
    3. Claire Benny & Shelby Yamamoto & Sheila McDonald & Radha Chari & Roman Pabayo, 2022. "Modelling Maternal Depression: An Agent-Based Model to Examine the Complex Relationship between Relative Income and Depression," IJERPH, MDPI, vol. 19(7), pages 1-12, April.
    4. Hounkpatin, Hilda Osafo & Wood, Alex M. & Dunn, Graham, 2016. "Does income relate to health due to psychosocial or material factors? Consistent support for the psychosocial hypothesis requires operationalization with income rank not the Yitzhaki Index," Social Science & Medicine, Elsevier, vol. 150(C), pages 76-84.
    5. Gero, Krisztina & Kondo, Katsunori & Kondo, Naoki & Shirai, Kokoro & Kawachi, Ichiro, 2017. "Associations of relative deprivation and income rank with depressive symptoms among older adults in Japan," Social Science & Medicine, Elsevier, vol. 189(C), pages 138-144.
    6. Naijie Guan & Alessandra Guariglia & Patrick Moore & Fangzhou Xu & Hareth Al-Janabi, 2022. "Financial stress and depression in adults: A systematic review," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-20, February.
    7. Esteban Sánchez-Moreno & Lorena P. Gallardo-Peralta, 2022. "Income inequalities, social support and depressive symptoms among older adults in Europe: a multilevel cross-sectional study," European Journal of Ageing, Springer, vol. 19(3), pages 663-675, September.
    8. David Brady & Michaela Curran & Richard Carpiano, 2023. "A test of the predictive validity of relative versus absolute income for self-reported health and well-being in the United States," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 48(26), pages 775-808.
    9. Wicke, Felix S. & Schmidt, Peter & Petersen, Julia & Ernst, Mareike & Krakau, Lina & Brähler, Elmar & Tibubos, Ana N. & Otten, Danielle & Reiner, Iris & Michal, Matthias & Schulz, Andreas & Münzel, Th, 2022. "Depression predicts equivalized income five years later, but not vice versa: Results from the prospective Gutenberg Health Study," Social Science & Medicine, Elsevier, vol. 313(C).

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