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Income, aspirations and the Hedonic Treadmill in a poor society

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  • Knight, John
  • Gunatilaka, Ramani

Abstract

A specially designed household survey for rural China is used to analyse the determinants of aspirations for income, proxied by reported minimum income need, and the determinants of subjective well-being, both satisfaction with life and satisfaction with income. It is found that aspiration income is a positive function of actual income and reference income, and that subjective well-being is raised by actual income but lowered by aspiration income. These findings suggest the existence of a partial ‘Hedonic Treadmill’, and can help to explain why subjective well-being in China appears not to have risen despite rapid economic growth.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 82 (2012)
Issue (Month): 1 ()
Pages: 67-81

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Handle: RePEc:eee:jeborg:v:82:y:2012:i:1:p:67-81

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Adaptation; Aspirations; China; Easterlin paradox; Happiness; Hedonic Treadmill; Subjective well-being;

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References

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. How Happy Are You? What You Want Vs What You Have
    by Miguel in Simoleon Sense on 2010-03-31 16:24:20
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Knight, John, 2013. "The economic causes and consequences of social instability in China," China Economic Review, Elsevier, vol. 25(C), pages 17-26.
  2. Bernard, Tanguy & Taffesse, Alemayehu Seyoum, 2012. "Measuring aspirations: Discussion and example from Ethiopia:," ESSP working papers 47, International Food Policy Research Institute (IFPRI).
  3. James Alm & Yongzheng Liu, 2013. "China's Tax-for-Fee Reform and Village Inequality," Working Papers 1304, Tulane University, Department of Economics.
  4. Hyll, Walter & Schneider, Lutz, 2013. "The causal effect of watching TV on material aspirations: Evidence from the “valley of the innocent”," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 37-51.
  5. Carlsson, Fredrik & Lampi, Elina & Li, Wanxin & Martinsson, Peter, 2011. "Subjective well-being among preadolescents - Evidence from urban China," Working Papers in Economics 500, University of Gothenburg, Department of Economics.
  6. Vinod Mishra & Ingrid Nielsen & Russell Smyth, 2014. "How Does Relative Income and Variations in Short-Run Wellbeing Affect Wellbeing in the Long Run? Empirical Evidence From China’s Korean Minority," Social Indicators Research, Springer, vol. 115(1), pages 67-91, January.
  7. repec:hal:wpaper:halshs-00564985 is not listed on IDEAS
  8. Powdthavee, Nattavudh & Stutzer, Alois, 2014. "Economic Approaches to Understanding Change in Happiness," IZA Discussion Papers 8131, Institute for the Study of Labor (IZA).
  9. John Knight & Ramani Gunatilak, 2014. "Subjective Well-being and Social Evaluation in a Poor Country," CSAE Working Paper Series 2014-09, Centre for the Study of African Economies, University of Oxford.
  10. Ravallion, Martin, 2012. "Poor, or just feeling poor ? on using subjective data in measuring poverty," Policy Research Working Paper Series 5968, The World Bank.
  11. repec:mos:druwps:2009-12 is not listed on IDEAS
  12. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute for the Study of Labor (IZA).
  13. GAO, Wenshu & SMYTH, Russell, 2010. "Job satisfaction and relative income in economic transition: Status or signal?: The case of urban China," China Economic Review, Elsevier, vol. 21(3), pages 442-455, September.

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