The Mystery of Chinese People’s Happiness

The great improvement in economic wealth and social welfare over the decade doesn’t promote the Chinese people’s happiness. We construct a theoretical framework which covers economic wealth, social welfare, individual functional capability to explore the impact factors and determinants of the Chinese people’s happiness. Based on a national wide questionnaire survey in China, we test and modify the framework by the method of structural equation model. The empirical findings indicate that there are direct and indirect effects on the formation of happiness. For the direct effect, both the increasing of economic wealth and social welfare improves the national happiness, while the individual functional capability reduces it. For the indirect effect, the individual functional capability also reduces happiness by negatively affecting economic wealth and social welfare. The negative effect that played by individual functional capability overwhelms the positive effect played by economic wealth and social welfare. This causes the Chinese people’s happiness goes down while the economic wealth and social welfare are improving. Finally, we conclude that the Chinese people’s happiness is more about individual functional capability rather than social welfare or economic wealth.