Income and Subjective Well-Being: A Case Study
Main Article Content
Abstract
This article examines to what extent income could influence subjective well-being based on a case study involving 249 working adult students from the School of Distance Education at Universiti Sains Malaysia (USM). Subjective well-being is represented by the respondent’s level of happiness and life satisfaction. The outcomes show happiness and life satisfaction are affected by household income, relative income, expected income and health. Household income seems to matter more in influencing both happiness and life satisfaction as compared to relative income. Respondents are less happy and less satisfied when the gap between their actual and expected income became larger. This study shows that better health status increases one’s happiness and life satisfaction. Being divorced, separated or widowed compared to being single shows an adverse impact on their happiness but has no significant influence on their life satisfaction. Age and life satisfaction displayed an inverted U-shaped relationship indicating that life satisfaction among the respondents reaches its peak at age 44 and starts to decline after that. The Malays seemed to be more satisfied with their lives as compared with the other ethnic groups.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Ang, C.S. and Mansor Abu Talib. 2011. An investigation of materialism and undergraduates’ life satisfaction. World Applied Sciences Journal 15(8): 1127– 1135.
Blanchflower, D.G. and A.J. Oswald. 2004. Well-being over time in Britain and the USA. Journal of Public Economic 88: 1359–1386.
______. 2008. Is well-being U-shaped over the life cycle? Social Science and Medicine 66(8): 1733–1749. https://doi:10.1016/j.socscimed.2008.01.030
Brockmann, H. and J. Delhey. 2010. Introduction: The dynamics of happiness and the dynamics of happiness research. Social Indicators Research 97(1): 1–5. https://doi.org10.1007/s11205-009-9561-3.
Caner, A. 2015. Happiness, comparison effects, and expectations in Turkey. Journal of Happiness Studies 16(5): 1323–1345. https://doi.org/10.1007/s10902-014-9562-z
Cheung, F. and R.E. Lucas. 2014. Assessing the validity of single-item life satisfaction measures: Results from three large samples. Quality of Life Research 23(10): 2809–2818.
______. 2016. Income inequality is associated with stronger social comparison effects: The effect of relative income on life satisfaction. Journal of Personality and Social Psychology 110(2): 332–341. https://doi.org/10.1037/pspp0000059
Chui, W.H. and M.Y.H. Wong. 2016. Gender differences in happiness and life satisfaction among adolescents in Hong Kong: Relationships and self-concept. Social Indicators Research 125(3): 1035–1051. https://doi.org/10.1007/s11205-015-0867-z
Clark, A.E. and A.J. Oswald. 1994. Unhappiness and unemployment. The Economic Journal 104(424): 648–659. https://doi.org/10.2307/2234639
______. 1996. Satisfaction and comparison income. Journal of Public Economics 61: 359–381.
Cummins, R.A. 1995. On the trail of the gold standard for life satisfaction. Social Indicators Research 35(2): 179–200. https://doi.org/10.1007/BF01079026.
______. 1998. The second approximation to an international standard for life satisfaction. Social Indicators Research 43(3): 307–334. https://doi.org/10.1023/A:1006831107052
Diener, E. 1984. Subjective well-being. Psychological Bulletin 95(3): 542–575. Diener, E., R. Inglehart and L. Tay. 2013. Theory and validity of life satisfaction scales. Social Indicators Research 112(3): 497–527. https://doi.org/10.1007/s11205012-0076-y
Diener, E. and M.P. Seligman. 2002. Very happy people. Psychological Science 13(1): 81–84. https://doi.org/10.1111/1467-9280.00415
Dolan, P., T. Peasgood and M. White. 2008. Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective wellbeing. Journal of Economic Psychology 29(1): 94–122. https://doi.org/10.1016/j. joep.2007.09.001
Easterlin, R.A. 1974. Does economic growth improve the human lot? Some empirical evidence. In Nations and households in economics growth: Essays in honor of Moses Abramowitz, eds. P.A. David and M.W. Reder, 89–125. New York: Academic Press.
______. 1995. Will raising the incomes of all increase the happiness of all? Journal of Economic Behaviour and Organization 27: 35–47.
______. 2001. Income and happiness: Towards a unified theory. The Economic Journal 111(473): 465–484.
______. 2006. Life cycle happiness and its sources: Intersections of psychology, economics, and demography. Journal of Economic Psychology 27(4): 463–482.
______. 2013. Happiness and economic growth: The evidence. St. Louis: Federal Reserve Bank of St Louis.
Easterlin, R.A. and L. Angelescu. 2009. Happiness and growth the world over: Time series evidence on the happiness-income paradox. St. Louis: Federal Reserve Bank of St Louis.
Eshkoor, S.A., Tengku Aizan Hamid, Y.M. Chan and Suzana Shahar. 2015. An investigation on predictors of life satisfaction among the elderly. International E-Journal of Advances in Social Sciences 1(2): 207–212. https://doi.org/10.18769/ijasos.86859
Ferrer-i-Carbonell, A. 2005. Income and well-being: An empirical analysis of the comparison income effect. Journal of Public Economics 89: 997–1019.
Finstad, K. 2010. Response interpolation and scale sensitivity: Evidence against 5-point scales. Journal of Usability Studies 5(3): 104–110.
Frey, B.S. and A. Stutzer. 2002a. The economics of happiness. World Economics 3(1): 1–17.
______. 2002b. What can economists learn from happiness research? Journal of Economic Literature 40(2): 402–435.
Gamble, A. and T. Gärling. 2012. The relationships between life satisfaction, happiness, and current mood. Journal of Happiness Studies 13(1): 31–45. https://doi.org/10.1007/s10902-011-9248-8.
Graham, C. and A. Felton. 2006. Inequality and happiness: Insights from Latin America. The Journal of Economic Inequality 4(1): 107–122. https://doi.org/10.1007/s10888-005-9009-1
Helliwell, J.F. 2002. How’s life? Combining individual and life variables to explain subjective well-being. St. Louis: Federal Reserve Bank of St Louis.
______. 2008. Life satisfaction and quality of development. Cambridge: National Bureau of Economic Research Working Paper Series, 14507.
Howell, R.T., W.T. Chong, C.J. Howell and K. Schwabe. 2012. Happiness and life satisfaction in Malaysia. In Happiness across culture: View of happiness and quality of life in non-Western cultures, eds. H. Selin and G. Davey, 43–55. New York: Springer.
Kugler, T., T. Connolly and L.D. Ordonez. 2010. Emotion, decision and risk: Betting on gambles versus betting on people. Journal of Behavioral Decision Making 25(2): 123–134.
Lam, K.J. and P. Liu. 2014. Socio-economic inequalities in happiness in China and U.S. Social Indicators Research 116(2): 509–533. https://doi.org/10.1007/s11205-0130283-1
Leung, A., C. Kier, T. Fung, L. Fung and R. Sproule. 2011. Searching for happiness: The importance of social capital. Journal of Happiness Studies 12(3): 443–462. https://doi.org/10.1007/s10902-010-9208-8.
McBride, M. 2001. Relative-income effects on subjective well-being in the cross-section. Journal of Economic Behaviour and Organization 45(3): 251–278. https://doi.org/10.1016/S0167-2681(01)00145-7
Ngoo, Y., N. Tey and E. Tan. 2015. Determinants of life satisfaction in Asia. Social Indicators Research 124: 141–156. https://doi.org/10.1007/s11205-014-0772-x
Oshio, T., K. Nozaki and M. Kobayashi. 2011. Relative income and happiness in Asia: Evidence from nationwide surveys in China, Japan, and Korea. Social Indicators Research 104(3): 351–367. https://doi.org/10.1007/s11205-010-9754-9
Redhwan Ahmed Al-Naggar, Karim Alwan Al-Jashamy, L.W. Yun, Zaleha Mohd Isa, Mutee Izidin Alsaror and Abdul-Gafoor Ahmed Al-Naggar. 2010. Perceptions and opinion of happiness among university students in a Malaysian university. ASEAN Journal of Psychiatry 11(2): 198–205.
Sacks, D.W., B. Stevenson and J. Wolfers. 2010. Subjective well-being, income, economic development and growth. Cambridge: National Bureau of Economic Research, Inc. https://doi.org/10.3386/w16441
Sekaran, U. 2003. Research methods for business: A skill building approach. 4th ed. New York: John Wiley & Sons. Selim, S. 2008. Life satisfaction and happiness in Turkey. Social Indicators Research 88(3): 531–562. https://doi.org/10.1007/s11205-007-9218-z
Solnick, S. and D. Hemenway. 1998. Is more always better? A survey of positional concerns. Journal of Economic Behaviour and Organization 37: 373–383.
Stevenson, B. and J. Wolfers. 2008. Economic growth and subjective well-being: Reassessing the Easterlin paradox. Cambridge: National Bureau of Economic Research, Inc. https://doi.org/10.3386/w14282
Stutzer, A. 2004. The role of income aspirations in individual happiness. Journal of Economic Behaviour and Organization 54(1): 89–109.
Stutzer, A. and B.S. Frey. 2006. Does marriage make people happy, or do happy people get married? Journal of Socio-Economics 35(2): 326–347.
Tambyah, S.K. and S.J. Tan. 2011. Subjective well-being in ASEAN: A cross-country study. Japanese Journal of Political Science 12(3): 359–373. https://doi.org/10.1017/S1468109911000168
Tsou, M. and J. Liu. 2001. Happiness and domain satisfaction in Taiwan. Journal of Happiness Studies 2(3): 269–288. https://doi.org/10.1023/A:101181429264
Tsui, H.-C. 2014. What affects happiness: Absolute income, relative income or expected income? Journal of Policy Modeling 36(6): 994–1007. https://doi.org/10.1016/j.jpolmod.2014.09.005
Veenhoven, R. and F. Vergunst. 2014. The Easterlin illusion: Economic growth does go with greater happiness. International Journal of Happiness and Development 1(4): 311–343.
Wu, Z. and C.M. Schimmele. 2006. Psychological disposition and self-reported health among the ‘oldest-old’ in China. Ageing and Society 26: 135–151.
Yamane, T. 1967. Statistics, an introductory analysis. 2nd ed. New York: Harper and Row.
Yen, S.H., H.E. Lim and K.J. Campbell. 2015. Is age an important factor in academics’ productivity? A case study in a public university in Malaysia. Malaysian Journal of Economic Studies 52(1): 97–116.
Yiengprugsawan, V., B. Somboonsook, S. Seubsman and A.C. Sleigh. 2012. Happiness, mental health, and socio-demographic associations among a national cohort of Thai adults. Journal of Happiness Studies 13(6): 1019–1029. https://doi.org/10.1007/s10902-011-9304-4
Yu, Z. and L. Chen. 2016. Income and well-being: Relative income and absolute income weaken negative emotion, but only relative income improves positive emotion. Frontiers in Psychology 7(257): 1–7. https://doi.org/10.3389/fpsyg.2016.02012