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Income, aspirations and the Hedonic Treadmill in a poor society

  • Knight, John
  • Gunatilaka, Ramani

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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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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