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The Effects of Wealth and Income on Subjective Well-Being and Ill-Being

Author

Listed:
  • Mark Wooden

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Bruce Headey

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

The accepted view among psychologists and, increasingly, economists is that household income has statistically significant but only small effects on measures of subjective well-being. Income, however, is clearly an imperfect measure of the economic circumstances of households. Using data drawn from the 2002 wave of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this paper demonstrates that wealth, which can be viewed as providing a degree of economic security, is at least as important to well-being and ill-being as income.

Suggested Citation

  • Mark Wooden & Bruce Headey, 2004. "The Effects of Wealth and Income on Subjective Well-Being and Ill-Being," Melbourne Institute Working Paper Series wp2004n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2004n03
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2004n03.pdf
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    References listed on IDEAS

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    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other

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