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Relative Income and Subjective Well-Being of Urban Residents in China

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  • Jichao Wang

    (Central University of Finance and Economics)

  • Wei Yan

    (Central University of Finance and Economics)

  • Jie Zhang

    (Central University of Finance and Economics
    State University of New York College at Buffalo)

Abstract

The purposes of this study are to examine subjective well-being and to test its correlation with social reference and self-expectations of urban residents in China. Data are obtained from the 2015 Chinese General Social Survey, and we focus on urban residents (N = 4857). Because the dependent variable is a sequence variable, the ordered logit model is used for data analysis. We find that absolute income remains an important factor in determining people’s subjective well-being. We also find that when relative income factors are included, the correlation between absolute income and subjective well-being is reduced. This suggests that the subjective well-being of urban residents is influenced not only by absolute income itself, but also—more importantly—by relative income based on social comparison and self-expectations. These findings have implications for the formulation of social policies to improve citizens’ happiness.

Suggested Citation

  • Jichao Wang & Wei Yan & Jie Zhang, 2019. "Relative Income and Subjective Well-Being of Urban Residents in China," Journal of Family and Economic Issues, Springer, vol. 40(4), pages 673-680, December.
    • Handle: RePEc:kap:jfamec:v:40:y:2019:i:4:d:10.1007_s10834-019-09636-0
    DOI: 10.1007/s10834-019-09636-0
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    5. Yi-Bin Chiu & Zhen Wang & Xu Ye, 2023. "Household gift-giving consumption and subjective well-being: evidence from rural China," Review of Economics of the Household, Springer, vol. 21(4), pages 1453-1472, December.

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