The relationship between income and subjective well-being: Relative or absolute?
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.Get Access
Although it appears that income and subjective well-being correlate in within-country studies (Diener, 1984), a debate has focused on whether this relationship is relative (Easterlin, 1974) or absolute (Veenhoven, 1988, 1991). The absolute argument advanced by Veenhoven states that income helps individuals meet certain universal needs and therefore that income, at least at lower levels, is a cause of subjective well-being. The relativity argument is based on the idea that the impact of income or other resources depends on changeable standards such as those derived from expectancies, habituation levels, and social comparisons. Two studies which empirically examine these positions are presented: one based on 18 032 college studies in 39 countries, and one based on 10 year longitudinal data in a probability sample of 4 942 American adults. Modest but significant correlations were found in the U.S. between income and well-being, but the cross-country correlations were larger. No evidence for the influence of relative standards on income was found: (1) Incomechange did not produce effects beyond the effect of income level per se, (2) African-Americans and the poorly educated did not derive greater happiness from specific levels of income, (3) Income produced the same levels of happiness in poorer and richer areas of the U.S., and (4) Affluence correlated with subjective well-being both across countries and within the U.S. Income appeared to produce lesser increases in subjective well-being at higher income levels in the U.S., but this pattern was not evident across countries. Conceptual and empirical questions about the universal needs position are noted. Suggestions for further explorations of the relativistic position are offered.
- Andrews, F. M., Robinson, J. P. Measures of subjective well-being. In: Robinson, J. P., Shaver, P., Wrightsman, L. eds. (1991) Measures of Social Psychological Attitudes. Academic Press, San Diego
- Andrews, F. M., Withey, S. B. (1976) Social Indicators of Well-Being: America's Perception of Life Quality. Plenum, New York
- Brickman, P., Campbell, D. T. Hedonic relativism and planning the good society. In: Appley, M. H. eds. (1971) Adaptation Level Theory: A Symposium. Academic Press, New York
- Brickman, P., Coates, D., Janoff-Bulman, R. (1978) Lottery winners and accident victims: Is happiness relative?. Journal of Personality and Social Psychology 36: pp. 917-927
- Cantril, H. (1965) The Pattern of Human Concern. Rutgers University Press, New Brunswick, NJ
- Cornoni-Huntley, J., Barbano, H. E., Brody, J. A., Cohen, B., Gledman, J. J., Kleinman, J. C., and Madans, J.: 1983, ‘National health and nutrition examination I — Epidemiological followup survey’, Public Health Reports 98, 245–251.
- Costa, P., McCrae, R., Zonderman, A. (1987) Environmental and dispositional influences on well-being: Longitudinal follow-up of an American national sample. British Journal of Psychology 78: pp. 299-306
- Costa, P., Zonderman, A., McCrae, R., Cornoni-Huntley, J., Locke, B., Barbano, H. (1987) Longitudinal analyses of psychological well-being in a national sample: Stability of mean levels. Journal of Gerontology 42: pp. 50-55
- Diener, E. (1984) Subjective well-being. Psychological Bulletin 85: pp. 542-575
- Diener, E., Horwitz, J., Emmons, R. A. (1985) Happiness of the very wealthy. Social Indicators Research 16: pp. 263-274
- Easterlin, R. A. Does economic growth improve the human lot? Some empirical evidence. In: David, P. A., Melvin, W. R. eds. (1974) Nations and Households in Economic Growth. Stanford University Press, Palo Alto, CA, pp. 98-125
- Taiwan Country Profile: Annual Survey of Political and Economic Background. Economist Intelligence Unit, London
- Emmons, R., Diener, E. (1985) Factors predicting satisfaction judgments: A comparative examination. Social Indicators Research 16: pp. 157-168
- Fazio, A. F. (1977) A concurrent validation study of the NCHS General Well-Being Schedule. National Center for Health Statistics, Hyattsville, MD
- Festinger, L. (1954) A theory of social comparison. Human Relations 7: pp. 117-140
- Fordyce, M. W. (1977) The Happiness Measures: A Sixty-Second Index of Emotional Well-Being and Mental Health. Edison Community College, Fort Myers, Florida
- Fordyce, M. W. (1988) A review of research on the happiness measures: A sixty second index of happiness and mental health. Social Indicators Research 20: pp. 355-381
- Fox, C., Kahneman, D. (1992) Correlation, causation and inference in surveys of life satisfaction. Social Indicators Research 27: pp. 221-234
- Fujita, F. and Diener, E.: 1991, Comparative Versus Self Judgments in Satisfaction Judgments, Manuscript in preparation (University of Illinois).
- Heady, B., Veenhoven, R. Does happiness induce a rosy outlook?. In: Veenhoven, R. eds. (1989) How Harmful is Happiness?. University of Rotterdam, Rotterdam, The Netherlands, pp. 106-127
- Himmelfarb, S., Murrell, S. A. (1983) Reliability and validity of five mental health scales in older persons. Journal of Gerontology 38: pp. 333-339
- Hoffman, M. S. eds. (1990) World Almanac and Book of Facts 1991. Pharos Books, New York
- Horwitz, A. V. (1984) The economy and social pathology. American Review of Sociology 10: pp. 95-119
- Inglehart, R., Rabier, J.-R. Aspirations adapt to situations — But why are the Belgians so much happier than the French? A cross-cultural analysis of the subjective quality of life. In: Andrews, F. M. eds. (1986) Research on the Quality of Life. University of Michigan, Ann Arbor, MI
- International Monetary Fund: 1990, International Financial Statistics Yearbook.
- Kammann, R., Campbell, K. (1982) Illusory correlation in popular beliefs about the causes of happiness. New Zealand Psychologist 11: pp. 52-62
- Lamberti, M. J., Smith, R. H., Diener, E., and Kim, S. H.: 1989, ‘Rank among peers and life satisfaction’, Paper presented at the 97th Annual Meeting of the American Psychological Association, New Orleans.
- Larsen, R. J., Diener, E., Emmons, R. A. (1985) An evaluation of subjective well-being measures. Social Indicators Research 17: pp. 1-18
- Michalos, A. C. (1985) Multiple discrepancies theory (MDT). Social Indicators Research 16: pp. 347-413
- Michalos, A. C. (1991) Global Report on Student Well-Being. Springer-Verlag, New York
- Parducci, A. (1968) The relativism of absolute judgments. Scientific American 219: pp. 84-90
- Pavot, W., Diener, E., Colvin, R., Sandvik, E. (1991) Further validation of the Satisfaction with Life Scale: Evidence for the cross-method convergence of self-report well-being measures. Journal of Personality Assessment 57: pp. 149-161
- Sandvik, E., Diener, E., and Seidlitz, L.: 1992, ‘Subjective well-being: The convergence and stability of self-report and nonself-report measures’, Journal of Personality (in press).
- Sherman, S. J., Ahlm, K., Berman, L. (1978) Contrast effects and their relationship to subsequent behavior. Journal of Experimental Social Psychology 14: pp. 340-350
- Smith, R., Diener, E., Wedell, D. (1989) Interpersonal and social comparison determinants of happiness: A range-frequency analysis. Journal of Personality and Social Psychology 56: pp. 317-325
- Thoits, P., Hannan, M. (1979) Income and psychological distress: the impact of an income-maintenance experiment. Journal of Health and Social Behavior 20: pp. 120-138
- Tversky, A., Griffin, D. Endowment and contrast in judgments of well-being. In: Strack, F., Argyle, M., Schwarz, N. eds. (1991) Subjective Well-Being: An Interdisciplinary Perspective. Pergamon Press, Oxford, pp. 101-118
- Veenhoven, R.: 1988, Is Happiness Relative?, paper presented at the 24th International Congress of Psychology, Sydney, Australia.
- Veenhoven, R. (1991) Is happiness relative. Social Indicators Research 24: pp. 1-34
- The relationship between income and subjective well-being: Relative or absolute?
Social Indicators Research
Volume 28, Issue 3 , pp 195-223
- Cover Date
- Print ISSN
- Online ISSN
- Kluwer Academic Publishers
- Additional Links
- Industry Sectors