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

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  • Headey, Bruce

    (Melbourne Institute of Applied Economic and Social Research)

  • Wooden, Mark

    (Melbourne Institute of Applied Economic and Social Research)

Abstract

The accepted view among psychologists and economists alike 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 2001 and 2002 waves 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

  • Headey, Bruce & Wooden, Mark, 2004. "The Effects of Wealth and Income on Subjective Well-Being and Ill-Being," IZA Discussion Papers 1032, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1032
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    More about this item

    Keywords

    subjective well-being; life satisfaction; income; wealth;
    All these keywords.

    JEL classification:

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

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