IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v63y2024i3p399-416.html
   My bibliography  Save this article

Understanding the Role of Income in Personal Happiness: A Comprehensive PSM Analysis in the United States (Article)

Author

Listed:
  • Hicham Ouakil
  • Lakhal Tarik
  • Hicham El Ouazzani
  • Abdelhamid Moustabchir

Abstract

This study examines the relationship between income and individual happiness in the United States using propensity score matching (PSM) analysis. Results reveal that income has a significant impact on individual happiness, with higher income levels associated with increased happiness. The research uses the General Social Survey (GSS) 2022, which marks the beginning of a shift to a mixed-mode survey, incorporating the delivery of both face-to-face and online questions. Employing the general principle of core hypotheses, the analysis aims to understand the causal relationship between income and happiness. The results suggest that improving income could be an effective strategy for increasing individuals’ levels of happiness. The study underlines the importance of considering income as a factor that promotes individual well-being and happiness.

Suggested Citation

  • Hicham Ouakil & Lakhal Tarik & Hicham El Ouazzani & Abdelhamid Moustabchir, 2024. "Understanding the Role of Income in Personal Happiness: A Comprehensive PSM Analysis in the United States (Article)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 63(3), pages 399-416.
    • Handle: RePEc:pid:journl:v:63:y:2024:i:3:p:399-416
    as

    Download full text from publisher

    File URL: https://file.pide.org.pk/pdfpdr/2024/399-416.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    2. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    3. Marco Caliendo & Reinhard Hujer, 2006. "The microeconometric estimation of treatment effects—An overview," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 199-215, March.
    4. Felix R. FitzRoy & Michael A. Nolan, 2022. "Income Status and Life Satisfaction," Journal of Happiness Studies, Springer, vol. 23(1), pages 233-256, January.
    5. Andrew E. Clark & Sarah Flèche & Nick Powdthavee & George Ward, 2017. "The key determinants of happiness and misery," Post-Print halshs-01513376, HAL.
    6. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    7. Sunitha Singh & Sowmya Kshtriya & Reimara Valk, 2023. "Health, Hope, and Harmony: A Systematic Review of the Determinants of Happiness across Cultures and Countries," IJERPH, MDPI, vol. 20(4), pages 1-68, February.
    8. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    9. Satya Paul, 2022. "Effects of Happiness on Income and Income Inequality," Journal of Happiness Studies, Springer, vol. 23(3), pages 1021-1041, March.
    10. Karen E. Dynan & Enrichetta Ravina, 2007. "Increasing Income Inequality, External Habits, and Self-Reported Happiness," American Economic Review, American Economic Association, vol. 97(2), pages 226-231, May.
    11. Behera, Deepak Kumar & Rahut, Dil B & Padmaja, M & Dash, Ajit Kumar, 2024. "Socioeconomic determinants of happiness: Empirical evidence from developed and developing countries," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    12. Conchita D’Ambrosio & Markus Jäntti & Anthony Lepinteur, 2020. "Money and Happiness: Income, Wealth and Subjective Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(1), pages 47-66, February.
    13. Easterlin, Richard A., 2023. "Why does happiness respond differently to an increase vs. decrease in income?," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 200-204.
    14. Kundu, Srikanta & Kundu, Ruma & Chettri, Kul Bahadur, 2024. "Asymmetric effects of democracy and macroeconomic factors on happiness under high and low per capita incomes: A threshold panel analysis," Ecological Economics, Elsevier, vol. 216(C).
    15. Taurean Hutchinson & Ishraq Ahmed & Pavlo Buryi, 2017. "Impact of income tax on happiness: evidence from the United States," Applied Economics Letters, Taylor & Francis Journals, vol. 24(18), pages 1277-1279, October.
    16. Ho, Daniel E. & Imai, Kosuke & King, Gary & Stuart, Elizabeth A., 2007. "Matching as Nonparametric Preprocessing for Reducing Model Dependence in Parametric Causal Inference," Political Analysis, Cambridge University Press, vol. 15(3), pages 199-236, July.
    17. Ferrer-i-Carbonell, Ada & Gowdy, John M., 2007. "Environmental degradation and happiness," Ecological Economics, Elsevier, vol. 60(3), pages 509-516, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roberta Distante, 2013. "Subjective Well-Being, Income and Relative Concerns in the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 81-105, August.
    2. Proto, Eugenio & Rustichini, Aldo, 2012. "Life Satisfaction, Household Income and Personality Traits," CAGE Online Working Paper Series 86, Competitive Advantage in the Global Economy (CAGE).
    3. Rémi Yin & Anthony Lepinteur & Andrew E Clark & Conchita d'Ambrosio, 2021. "Life Satisfaction and the Human Development Index Across the World," Working Papers halshs-03174513, HAL.
    4. Santi Budria & Ada Ferrer-i-Carbonell, 2012. "Income Comparisons and Non-cognitive Skills," SOEPpapers on Multidisciplinary Panel Data Research 441, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Drakopoulos, Stavros, 2011. "Hierarchical Needs, Income Comparisons and Happiness Levels," MPRA Paper 48343, University Library of Munich, Germany.
    6. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével [Examining the relation of utility and relative income using Hungarian data]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    7. Proto, Eugenio & Rustichini, Aldo, 2015. "Life satisfaction, income and personality," Journal of Economic Psychology, Elsevier, vol. 48(C), pages 17-32.
    8. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
    9. Jan-Emmanuel De Neve & George Ward & Femke De Keulenaer & Bert Van Landeghem & Georgios Kavetsos & Michael I. Norton, 2018. "The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence Using Subjective Well-Being Data," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 362-375, May.
    10. O'Donnell, Gus & Oswald, Andrew J., 2015. "National well-being policy and a weighted approach to human feelings," Ecological Economics, Elsevier, vol. 120(C), pages 59-70.
    11. Hania Wu & Tony Tam, 2015. "Economic Development and Socioeconomic Inequality of Well-Being: A Cross-Sectional Time-Series Analysis of Urban China, 2003–2011," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(2), pages 401-425, November.
    12. Zhiming Cheng & Haining Wang & Russell Smyth, 2014. "Happiness and job satisfaction in urban China: A comparative study of two generations of migrants and urban locals," Urban Studies, Urban Studies Journal Limited, vol. 51(10), pages 2160-2184, August.
    13. Maurizio Pugno & Francesco Sarracino, 2021. "Structural Changes in Economic Growth and Well-Being: The Case of Italy’s Parabola," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(3), pages 801-838, December.
    14. Zeynep B. Ugur, 2021. "Does Money Buy Happiness in Turkey?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(3), pages 1073-1096, June.
    15. Aviral Kumar Tiwari, 2011. "Happiness and Environmental Degradation: What Determines Happiness?," Economics Bulletin, AccessEcon, vol. 31(4), pages 3192-3210.
    16. Eugenio Proto & Aldo Rustichini, 2012. "Life Satisfaction, Household Income and Personality Theory," SOEPpapers on Multidisciplinary Panel Data Research 453, DIW Berlin, The German Socio-Economic Panel (SOEP).
    17. Tekleselassie, Tsegay Gebrekidan, 2016. "Three essays on the impact of institutions and policies on socio-economic outcomes," Economics PhD Theses 1316, Department of Economics, University of Sussex Business School.
    18. Hammond, Peter J & Liberini, Federica & Proto, Eugenio, 2013. "Do Happier Britons Have More Income? First-Order Stochastic Dominance Relations," CAGE Online Working Paper Series 166, Competitive Advantage in the Global Economy (CAGE).
    19. Biswajit Banerjee & Peter Tóth, 2025. "Life Satisfaction and Inequality in Slovakia: The Role of Income, Consumption and Wealth," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 177(1), pages 93-126, March.
    20. Sarah Flèche, 2015. "Distaste for Centralization: Evidence from a Quasi-Natural Experiment in Switzerland," CEP Discussion Papers dp1383, Centre for Economic Performance, LSE.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:63:y:2024:i:3:p:399-416. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.