Racial differences in the income–well-being gradient

Existing research documents a log-linear relationship between income and subjective well-being, known as the income–well-being gradient. Using data from millions of Americans, mainly from the Gallup Daily Poll, we find significant racial differences in this gradient. Whites exhibit a steeper income–well-being gradient than Blacks, Hispanics, and Asians. These gradient differences remain after accounting for demographic, socioeconomic, neighborhood, and relative income factors. Additional analyses reveal similar racial heterogeneity in (i) other well-being measures, (ii) expected future well-being, and (iii) the age–well-being relationship. These findings underscore the important role of race in the well-being relationships and the need to better understand the dimensions of heterogeneity in the income–well-being gradient.