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Of Income Satisfaction with life happiness

Author: TangDongBo
Tutor: FuHongChun
School: Shanghai Normal University
Course: National Economics
Keywords: Happiness Utility Income Income satisfaction Gini coefficient
CLC: F014.5
Type: Master's thesis
Year: 2009
Downloads: 425
Quote: 1
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Abstract


Traditional economic theory holds the opinion that the increase in income will bring about a corresponding increase in the level of happiness. However, more and more experience studies have shown that: even though the person with high-income level, at a certain time, is higher than that of the person with low-income on the cross-section, from a longer period of view, people has not been more happy with the rise of the income, but maintained at a broadly stable state. Firstly, this article reviewed the experience studies on the relationship between happiness and income, which include traditional economic theory, the study of the return and abandon of happiness in the traditional economic studies, and some important stages of the studies on the relationship between happiness and income. Also, we have investigated some theoretical models, from the cross-sectional data on average happiness among countries, and analyzed the effect of the growth of national wealth, from the perspective of time series data analysis, on the Gross National Happiness, as well as changes of the personal income on subjective well-being and so on. At the same time, this paper adopted the relative income theory and the change in the level of one’s ambition to shed light on the empirical results of the relationship between the two aspects. Hedonomics research has put forward a series of amendments of great significance to the traditional economics. Then we present the comprehensive analysis of the data collected in a social survey on the income and life satisfaction degree related to people’s subjective well-being. There are 10 major provinces and regions covered in the happiness survey and a total of more than 1300 valid sample data available for the statistic analysis. The main analysis results showed that: there is a significant positive correlation between the level of income and well-being index in the same area at the same time. There are many important factors which have substantial impact on the happiness index. Some significantly effective factors cover the housing satisfaction, health satisfaction, education satisfaction, and environmental satisfaction, etc. The empirical analysis results indicate that the overall Gini coefficient of income has reached 0.47, which is much higher than the international warning line of 0.4. However, according to the general population sort of happy the Gini coefficient is only 0.21. Finally, this paper puts forward some policy suggestions on how to improve the overall well-being in our country.

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CLC: > Economic > Economics > Basic problems of economics > Sectors of the economy > Consumption and accumulation
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