Advertisement

Social Indicators Research

, Volume 132, Issue 2, pp 885–905 | Cite as

Subjective Well-Being in China: Associations with Absolute, Relative, and Perceived Economic Circumstances

  • Nicholas OtisEmail author
Article

Abstract

Numerous studies examining the impact of income on subjective well-being (SWB) have found significant positive relationships exhibiting decreasing marginal returns. However, the impact of economic circumstances on SWB is better captured through a combination of income, wealth (per capita net worth), and perceived and relative economic conditions. Using data from the Chinese Household Income Project, I find that within rural and urban China, wealth significantly predicts SWB, exhibiting decreasing marginal returns independent of more common measures of economic circumstances such as income and occupational status. Within urban China, these associations decrease in magnitude and significance with the addition of objective relative measures of wealth and income. Finally, I find that subjective perceptions of relative standard of living are strongly associated with SWB independent of other measures. These results highlight the importance of using multiple objective and subjective measures of economic circumstances, demonstrating potential limitations of studies that have focused exclusively on income as a predictor of well-being. Results are interpreted within the context of China’s changing social and economic structure.

Keywords

Subjective well-being Wealth China Income Relative deprivation Happiness 

References

  1. Aknin, L. B., Norton, M. I., & Dunn, E. W. (2009). From wealth to well-being? Money matters, but less than people think. The Journal of Positive Psychology, 4(6), 523–527.CrossRefGoogle Scholar
  2. Anderson, C., Kraus, M. W., Galinsky, A. D., & Keltner, D. (2012). The local-ladder effect social status and subjective well-being. Psychological Science, 23(7), 764–771.CrossRefGoogle Scholar
  3. Appleton, S., & Song, L. (2008). Life satisfaction in urban China: Components and determinants. World Development, 36(11), 2325–2340.CrossRefGoogle Scholar
  4. Baumeister, R. F., & Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a fundamental human motivation. Psychological Bulletin, 117(3), 497–529.CrossRefGoogle Scholar
  5. Biswas-Diener, R., & Diener, E. (2001). Making the best of a bad situation: Satisfaction in the slums of Calcutta. Social Indicators Research, 55(3), 329–352.CrossRefGoogle Scholar
  6. Bookwalter, J. T., & Dalenberg, D. R. (2010). Relative to what or whom? The importance of norms and relative standing to well-being in South Africa. World Development, 38(3), 345–355.CrossRefGoogle Scholar
  7. Boyce, C. J., Brown, G. D., & Moore, S. C. (2010). Money and happiness: Rank of income, not income, affects life satisfaction. Psychological Science, 21(4), 471–475.CrossRefGoogle Scholar
  8. Chan, K. W. (2010). The household registration system and migrant labor in China: Notes on a debate. Population and development review, 36(2), 357–364CrossRefGoogle Scholar
  9. Chan, K. W., & Zhang, L. (1999). The hukou system and rural-urban migration in China: Processes and changes. The China Quarterly, 160, 818–855.CrossRefGoogle Scholar
  10. Clark, A. E., Frijters, P., & Shields, M.A. (2008). Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.CrossRefGoogle Scholar
  11. Deaton, A. (2008). Income, health and well-being around the world: Evidence from the Gallup World Poll. The Journal of Economic Perspectives: A Journal of the American Economic Association, 22(2), 53–72.CrossRefGoogle Scholar
  12. Diener, E. (1984). Subjective well-being. Psychological Bulletin, 95, 542–575.CrossRefGoogle Scholar
  13. Diener, E. (2012). New findings and future directions for subjective well-being research. American Psychologist, 67(8), 590–597.CrossRefGoogle Scholar
  14. Diener, E., & Biswas-Diener, R. (2000). New directions in subjective well-being research: The cutting edge. Indian Journal of Clinical Psychology, 27(1), 21–33.Google Scholar
  15. Diener, E., & Biswas-Diener, R. (2002). Will money increase subjective well-being? Social Indicators Research, 57(2), 119–169.CrossRefGoogle Scholar
  16. Diener, E., & Lucas, R. E. (2000). Explaining differences in societal levels of happiness: Relative standards, need fulfillment, culture, and evaluation theory. Journal of Happiness Studies, 1(1), 41–78.CrossRefGoogle Scholar
  17. Diener, E., Lucas, R. E., & Scollon, C. N. (2006). Beyond the hedonic treadmill: Revising the adaptation theory of well-being. American Psychologist, 61(4), 305.CrossRefGoogle Scholar
  18. Diener, E., & Oishi, S. (2000). Money and happiness: Income and subjective well-being across nations. In E. Diener & E. M. Suh (Eds.), Culture and subjective well-being (pp. 185–218). Cambridge, MA: MIT Press.Google Scholar
  19. Diener, E., Oishi, S., & Ryan, K. L. (2013a). Universals and cultural differences in the causes and structure of happiness: A multilevel review. In C. Keyes (Ed.), Mental well-being (pp. 153–176). Dordrecht: Springer.CrossRefGoogle Scholar
  20. Diener, E., & Seligman, M. E. (2004). Beyond money toward an economy of well-being. Psychological Science in the Public Interest, 5(1), 1–31.CrossRefGoogle Scholar
  21. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. L. (1999). Subjective well-being: Three decades of progress. Psychological Bulletin, 125(2), 276–302.CrossRefGoogle Scholar
  22. Diener, E., Tay, L., & Oishi, S. (2013b). Rising income and the subjective well-being of nations. Journal of Personality and Social Psychology, 104(2), 267–276.CrossRefGoogle Scholar
  23. Easterlin, R. A. (1974). Does economic growth improve the human lot? Some empirical evidence. Nations and households in Economic Growth, 89, 89–125.Google Scholar
  24. Easterlin, R. A., Morgan, R., Switek, M., & Wang, F. (2012). China’s life satisfaction, 1990–2010. Proceedings of the National Academy of Sciences, 109(25), 9775.CrossRefGoogle Scholar
  25. Eid, M., & Diener, E. (2004). Global judgments of subjective well-being: Situational variability and long-term stability. Social Indicators Research, 65(3), 245–277.CrossRefGoogle Scholar
  26. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How Important is Methodology for the estimates of the determinants of Happiness? The Economic Journal, 114(497), 641–659.  CrossRefGoogle Scholar
  27. Ferrer-i-Carbonell, A. (2005). Income and well-being: an empirical analysis of the comparison income effect. Journal of Public Economics, 89(5), 997–1019.CrossRefGoogle Scholar
  28. Gilbert, D. (2002). The American class structure in an age of growing inequality (6th ed.). New York, NY: Wadsworth.Google Scholar
  29. Gong, P., Liang, S., Carlton, E. J., Jiang, Q., Wu, J., Wang, L., & Remais, J. V. (2012). Urbanization and health in China. The Lancet, 379(9818), 843–852.CrossRefGoogle Scholar
  30. Headey, B., Muffels, R., & Wooden, M. (2008). Money does not buy happiness: Or does it? A reassessment based on the combined effects of wealth, income and consumption. Social Indicators Research, 87(1), 65–82.CrossRefGoogle Scholar
  31. Headey, B., & Wooden, M. (2004). The effects of wealth and income on subjective well-being and ill-being. Economic Record, 80(s1), S24–S33.CrossRefGoogle Scholar
  32. Hochman, O., & Skopek, N. (2013). The impact of wealth on subjective well-being: A comparison of three welfare-state regimes. Research in Social Stratification and Mobility, 34, 127–141.CrossRefGoogle Scholar
  33. Howell, R. T., & Howell, C. J. (2008). The relation of economic status to subjective well-being in developing countries: A meta-analysis. Psychological Bulletin, 134(4), 536.CrossRefGoogle Scholar
  34. Howell, C. J., Howell, R. T., & Schwabe, K. A. (2006). Is income related to happiness for the materially deprived? Examining the association between wealth and life satisfaction among indigenous Malaysian farmers. Social Indicators Research, 76, 499–524.CrossRefGoogle Scholar
  35. International Monetary Fund. (2013). Transitions and tensions. Washington, DC: World Economic Outlook, World Economic and Financial Survey.Google Scholar
  36. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489–16493.CrossRefGoogle Scholar
  37. Keltner, D., Gruenfeld, D. H., & Anderson, C. (2003). Power, approach, and inhibition. Psychological Review, 110(2), 265–284.CrossRefGoogle Scholar
  38. Kenny, C. (2005). Does development make you happy? Subjective wellbeing and economic growth in developing countries. Social Indicators Research, 73(2), 199–219.CrossRefGoogle Scholar
  39. Kingdon, G., & Knight, J. (2007). Unemployment in South Africa, 1995–2003: causes, problems and policies. Journal of African Economies, 16(5), 813–848.CrossRefGoogle Scholar
  40. Knight, J., & Gunatilaka, R. (2011). Does economic growth raise happiness in China? Oxford Development Studies, 39(01), 1–24.CrossRefGoogle Scholar
  41. Li, S., & Zhao, R. (2007). Changes in the distribution of wealth in China, 19952002. Research Article No. 2007/3 in UNUWIDER. http://econarticles.repec.org/article/unuwarticle/rp2007-03.htm.
  42. Mani, A., Mullainathan, S., Shafir, E., & Zhao, J. (2013). Poverty impedes cognitive function. Science, 341(6149), 976–980.CrossRefGoogle Scholar
  43. Mathews, G. (2012). Happiness, culture, and context. International Journal of Wellbeing, 2(4), 299–312.CrossRefGoogle Scholar
  44. McBride, M. (2001). Relative-income effects on subjective well-being in the cross-section. Journal of Economic Behavior & Organization, 45(3), 251–278.CrossRefGoogle Scholar
  45. Milanovic, B., & Jovanovic, B. (1999). Change in the perception of the poverty line during times of depression. Policy Research Working Papers, World Bank WPS, Washington, DC.Google Scholar
  46. Mullis, R. J. (1992). Measures of economic well-being as predictors of psychological well-being. Social Indicators Research, 26(2), 119–135.CrossRefGoogle Scholar
  47. Pacek, A., & Radcliff, B. (2008). Assessing the welfare state: The politics of happiness. Perspectives on Politics, 6(02), 267–277.CrossRefGoogle Scholar
  48. Pavot, W., & Diener, E. (2013). Happiness experienced: The science of subjective well-being. In S. David, I. Boniwell, & A. C. Ayers (Eds.), Oxford handbook of happiness (pp. 134–154). Oxford: Oxford University Press.Google Scholar
  49. Piketty, T., & Qian, N., (2006). Income inequality and progressive income taxation in China and India, 19862015. CEPR Discussion Paper 5703. Centre for Economic Policy Research, London.Google Scholar
  50. Sacks, D., Stevenson, B., & Wolfers, J. (2010). Subjective well-being, income, economic development and growth. NBER Working Paper 16441. Cambridge, MA: National Bureau of Economic Research.Google Scholar
  51. Sandvik, E., Diener, E., & Seidlitz, L. (1993). Subjective well-being: The convergence and stability of self-report and non-self-report measures. Journal of Personality, 61(3), 317–342.CrossRefGoogle Scholar
  52. Schimmack, U., Schupp, J., & Wagner, G. G. (2008). The influence of environment and personality on the affective and cognitive component of subjective well-being. Social Indicators Research, 89(1), 41–60.CrossRefGoogle Scholar
  53. Sheehy-Skeffington, J., & Haushofer, J. (2014). The behavioural economics of poverty. In UNDP barriers to and opportunities for poverty reduction (pp. 96–112).Google Scholar
  54. Shi, L. (2002). Chinese Household Income Project, ICPSR21741-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2009-08-14. http://doi.org/10.3886/ICPSR21741.v1.
  55. Stevenson, B., & Wolfers, J. (2008). Economic growth and subjective well-being: Reassessing the Easterlin paradox (No. w14282). National Bureau of Economic Research, 1–102.Google Scholar
  56. Stone, A. A., Shiffman, S. S., & DeVries, M. (1999). Rethinking our self-report assessment methodologies: An argument for collecting ecological valid, momentary measurements. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Wellbeing: The foundations of hedonic psychology (pp. 26–39). New York: Russell Sage Foundation.Google Scholar
  57. Suh, E. (2000). Self, the hyphen between culture and subjective well-being. In E. Diener & E. M. Suh (Eds.), culture and subjective well-being (pp. 63–86). Cambridge, MA: MIT Press.Google Scholar
  58. Tse, E. (2010). The China strategy: harnessing the power of the world’s fastest-growing economy. New York: Basic Books.Google Scholar
  59. Veenhoven, R. (1991). Is happiness relative? Social Indicators Research, 24(1), 1–34.CrossRefGoogle Scholar
  60. Wei, S. J., & Wu, Y. (2001). Globalization and inequality: Evidence from within China. No. w8611. Cambridge, MA: National Bureau of Economic Research.CrossRefGoogle Scholar
  61. World Bank. (2007). China’s modernizing labor market: Trends and emerging challenges. Washington, DC: World Bank.Google Scholar
  62. World Bank. (1999). Tanzania: Peri-urban development in the African 733 Mirror. Report No. 19526TA. Washington, DC: World Bank.Google Scholar
  63. World Values Survey. (2009). 19812008 official aggregate v. 20090901, 2009. World Values Survey Association.Google Scholar
  64. Xie, Y., & Zhou, X. (2014). Income inequality in today’s China. Proceedings of the National Academy of Sciences, 111(19), 6928–6933.CrossRefGoogle Scholar
  65. Yang, Dennis Tao. (1999). Urban-biased politics and rising income inequality in China. American Economic Review, 89(2), 306–310.CrossRefGoogle Scholar
  66. Zhao, R., & Sai, D. (2008). The distribution of wealth in China. In B. Gustafsson, L. Shi, & T. Sicular (Eds.), Inequality and public policy in China (pp. 118–144). Cambridge, UK, New York: Cambridge University Press.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Princeton UniversityPrincetonUSA

Personalised recommendations