The New Stylized Facts About Income and Subjective Well-Being
AbstractIn recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9280.
Date of creation: Jan 2013
Date of revision:
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Other versions of this item:
- Daniel W. Sacks & Betsey Stevenson & Justin Wolfers, 2013. "The New Stylized Facts about Income and Subjective Well-Being," CESifo Working Paper Series 4067, CESifo Group Munich.
- Sacks, Daniel W. & Stevenson, Betsey & Wolfers, Justin, 2012. "The New Stylized Facts about Income and Subjective Well-Being," IZA Discussion Papers 7105, Institute for the Study of Labor (IZA).
- Justin Wolfers & Daniel W. Sacks & Betsey Stevenson, 2013. "The New Stylized Facts About Income and Subjective Well-Being," CAMA Working Papers 2013-03, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- D6 - Microeconomics - - Welfare Economics
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
- J1 - Labor and Demographic Economics - - Demographic Economics
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-EVO-2013-04-13 (Evolutionary Economics)
- NEP-HAP-2013-04-13 (Economics of Happiness)
- NEP-LTV-2013-04-13 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Links and Notes from April 17th Whitaker Institute Talk on Well-Being
by Liam Delaney in Economics and Psychology Research on 2013-05-03 19:32:00
- The New Stylized Facts about Income and Subjective Well-Being
by maximorossi in NEP-LTV blog on 2013-02-27 12:59:25
- The New Stylized Facts About Income and Subjective Well-Being
by maximorossi in NEP-LTV blog on 2013-03-04 12:45:56
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Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 231-258, January-D.
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