Subjective Well-Being, Income, Economic Development and Growth We explore the relationships between subjective well-being and income, as seen across individuals within a given country, between countries in a given year, and as a country grows through time. We show that richer individuals in a given country are more satisfied with their lives than are poorer individuals, and establish that this ...

This paper is an attempt to test the hypothesis that utility depends on income relative to a 'comparison' or reference level. Using data on 5,000 British workers, it provides two findings. First, workers' reported satisfaction levels are shown to be inversely related to their comparison wage rates. Second, holding income constant, satisfaction levels are shown to be strongly declining in the le...

In seeking to answer the question of whether income brings happiness, Richard Easterlin (1974, 1995) found a paradox. Within a given country, higher-income respondents usually reported greater happiness; however – in cross-country comparison – if aggregate income in a country rises, happiness does not necessarily follow. Both theoretical and empirical social research provides a number of explan...

We show that personality traits mediate the effect of income on Life Satisfaction. The effect is strong in the case of Neuroticism, which measures the sensitivity to threat and punishment, in both the British Household Panel Survey and the German Socioeconomic Panel. Neuroticism increases the usually observed concavity of the relationship: Individuals with higher Neuroticism score enjoy income ...

Traditional tools of welfare economics identify the envy-related welfare loss from conspicuous consumption only under very strong assumptions. Measured income and life satisfaction offers an alternative for estimating such consumption externalities. The approach is developed in the context of luxury car consumption (Ferraris and Porsches) in Switzerland. Results from household panel data and fi...

This paper concentrates on the complex interplay between poverty, wealth and life satisfaction. Main areas of life are quantified in a multidimensional approach of poverty and wealth: Individual income, current health, occupational autonomy or employment status and life satisfaction. The analyzed data was taken from the German Socio Economic Panel Study (SOEP) at the German Institute for Econom...

An overview is presented of some parametric and semi-parametric models, estimators, and specification tests that can be used to analyze ordered response variables. In particular, limited dependent variable models that generalize ordered probit are compared to regression models that generalize the linear model. These techniques are then applied to analyze how self-reported satisfaction with hous...

We show that personality traits mediate the effect of income on Life Satisfaction. The effect is strong in the case of Neuroticism, which measures the sensitivity to threat and punishment, in both the British Household Panel Survey and the German Socioeconomic Panel. Neuroticism increases the usually observed concavity of the relationship: Individuals with higher Neuroticism score enjoy income ...