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Migrant happiness in China

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  • Karsten von Kleist

Abstract

In China, surveys find that migrant households' average happiness (compared with rural households) is lower despite higher income. These findings appear to contradict the standard microeconomic utility function, which predicts that higher income will always result in higher utility. We show that an intuitively plausible modification of the utility function, relating income to status and security utility, preserves standard microeconomic maximization results, and also provides a consistent explanation for the empirical findings on happiness. These results lead to some novel but intuitively plausible implications for economic development in China and elsewhere.

Suggested Citation

  • Karsten von Kleist, 2010. "Migrant happiness in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(2), pages 157-166.
    • Handle: RePEc:taf:jocebs:v:8:y:2010:i:2:p:157-166
    DOI: 10.1080/14765281003750207
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    References listed on IDEAS

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    1. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
    2. Richard Easterlin, 2005. "Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Veenhoven," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(3), pages 429-443, December.
    3. John Knight & Ramani Gunatilaka, 2008. "Aspirations, Adaptation and Subjective Well-Being of Rural-Urban Migrants in China," Economics Series Working Papers 381, University of Oxford, Department of Economics.
    4. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56(4), pages 279-279.
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