East Meets West: Income and Subjective Well-Being

Abstract

Using data from Taiwan and the US, this study empirically investigates the potential difference of the income effect on subjective well-being in the East versus the West. It finds that while relative individual income raises happiness in the US, relative family income only improves happiness and life satisfaction in Taiwan. This finding highlights different cultural values in that the East tends to emphasize collectivism while the West tends to emphasize individualism.