Maslow’s Needs Hierarchy and the Effect of Income on Happiness Levels
Abraham Maslow’s theory of hierarchical needs has been employed by a large variety of conceptual frameworks. The theory can also offer additional insights to the research field which investigates the relationship between income and reported happiness levels. The incorporation of needs hierarchy into a happiness framework implies that individuals have a priority approach to happiness. This means that the most important needs must be satisfied first before the secondary needs come into the picture. In terms of income-happiness relationship, it suggests that income is very important for happiness up to a certain level of income. For higher income levels this effect becomes much weaker, given that the satisfaction of non-basic needs becomes important. The chapter tests this idea by using the European Foundation European Quality of Life Survey 2007 which contains data from 30 European countries and Turkey. In the proposed model, reported happiness is placed as a dependent variable and income level as an independent variable. The ordered probit model (with robust standard errors) is the main statistical tool of the work. The empirical results indicate that there is a strong positive relationship between income and happiness for low income households group, and a non-significant relationship between income and happiness for high income households group. This result supports the presence of hierarchical behaviour. The model also contains personal variables such as gender, age, marital status, educational level, number of children, working hours per week, country dummy variables and employment status. The relationship of these variables to reported happiness levels is also examined. Finally, there is a comparison of the empirical findings to results in the relevant literature.
|Date of creation:||Oct 2013|
|Publication status:||Published in The Happiness Compass: Theories, Actions and Perspectives for Well-Being, F. Sarracino (ed), Nova Science Publ., New York, (2013): pp. 295-309|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Canova, Luigina & Rattazzi, Anna Maria Manganelli & Webley, Paul, 2005. "The hierarchical structure of saving motives," Journal of Economic Psychology, Elsevier, vol. 26(1), pages 21-34, February.
- Stefano Bartolini & Ennio Bilancini & Maurizio Pugno, 2008. "Did the Decline in Social Capital Depress Americans’ Happiness?," Department of Economics University of Siena 540, Department of Economics, University of Siena.
- Dora Gudmundsdottir, 2013. "The Impact of Economic Crisis on Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1083-1101, February.
- Gerdtham, Ulf-G & Johannesson, Magnus, 2001.
"The relationship between happiness, health, and socio-economic factors: results based on Swedish microdata,"
Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics),
Elsevier, vol. 30(6), pages 553-557.
- Gerdtham, Ulf-G & Johannesson, Magnus, 1997. "The Relationship between Happiness, Health and Socio-economic Factors: Results Based on Swedish Micro Data," SSE/EFI Working Paper Series in Economics and Finance 207, Stockholm School of Economics.
- Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
- Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
- John F. Helliwell, 2002. "How's Life? Combining Individual and National Variables to Explain Subjective Well-Being," NBER Working Papers 9065, National Bureau of Economic Research, Inc.
- Jackson, Tim & Marks, Nic, 1999. "Consumption, sustainable welfare and human needs--with reference to UK expenditure patterns between 1954 and 1994," Ecological Economics, Elsevier, vol. 28(3), pages 421-441, March.
- Max-Neef, Manfred, 1995. "Economic growth and quality of life: a threshold hypothesis," Ecological Economics, Elsevier, vol. 15(2), pages 115-118, November.
- Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
- Gary Charness & Brit Grosskopf, 1999. "Relative payoffs and happiness: An experimental study," Economics Working Papers 436, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000.
- Charness, Gary B & Grosskopf, Brit, 2000. "Relative Payoffs And Happiness: An Experimental Study," University of California at Santa Barbara, Economics Working Paper Series qt8389x8z2, Department of Economics, UC Santa Barbara.
- Brit Grosskopf, 2000. "Relative Payoffs and Happiness: An Experimental Study," Econometric Society World Congress 2000 Contributed Papers 1263, Econometric Society.
- Drakopoulos, S. A. & Karayiannis, A. D., 2004. "The Historical Development of Hierarchical Behavior in Economic Thought," Journal of the History of Economic Thought, Cambridge University Press, vol. 26(03), pages 363-378, September.
- Stefano Bartolini & Ennio Bilancini & Maurizio Pugno, 2013. "Did the Decline in Social Connections Depress Americans’ Happiness?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1033-1059, February.
- Kenny, Charles, 1999. "Does Growth Cause Happiness, or Does Happiness Cause Growth?," Kyklos, Wiley Blackwell, vol. 52(1), pages 3-25.
- 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.
- Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
- Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles," Post-Print halshs-00754299, HAL.
- Greene,William H. & Hensher,David A., 2010. "Modeling Ordered Choices," Cambridge Books, Cambridge University Press, number 9780521194204, December.
- Greene,William H. & Hensher,David A., 2010. "Modeling Ordered Choices," Cambridge Books, Cambridge University Press, number 9780521142373, December.
- Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
- Stavros Drakopoulos, 2008. "The paradox of happiness: towards an alternative explanation," Journal of Happiness Studies, Springer, vol. 9(2), pages 303-315, June.
- Drakopoulos, Stavros A., 2005. "The paradox of Happiness: towards an alternative explanation," MPRA Paper 6870, University Library of Munich, Germany.
- Des Gasper, 2005. "Subjective and Objective Well-Being in Relation to Economic Inputs: Puzzles and Responses," Review of Social Economy, Taylor & Francis Journals, vol. 63(2), pages 177-206.
- Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
- Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
- Diego Fernandez-Duque & Jessica Landers, 2008. "``Feeling more regret than I would have imagined'': Self-report and behavioral evidence," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3(6), pages 449-456, August.
- Drakopoulos, S A, 1994. " Hierarchical Choice in Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 8(2), pages 133-153, June.
- J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, September.
- Drakopoulos, Stavros A., 2008. "The Concept Of Comparison Income: An Historical Perspective," MPRA Paper 8713, University Library of Munich, Germany.
- Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:50987. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.