Abstract
Financial status is thought to be an important determinant of psychological well-being. We investigate this relationship, and the effect of other factors, using a parametric mixed modelling approach for panel data, controlling the problem of unobservable heterogeneity.Two nationally representative surveys, the British Household Panel Survey (BHPS) and the Understanding Society Survey (USS), were used to construct a unified data set which measured psychological well-being and associated factors using the 12-item General Health Questionnaire (GHQ-12). The GHQ-12 score for the head of the household was used as the dependant variable and its relationship with multiple independent demographic and financial status variables was investigated. Following assessment of growth curve characteristics with linear, curvilinear and higher-order polynomial modelling; several variance-covariance structures were tested to assess the error covariance structure of the longitudinal data. The random intercept and random slope were allowed to vary across participants, and methods such as natural splines and B-splines were used to improve the fit of some variables. Our final model demonstrated the most important variables affecting self-reported psychological well-being, as determined by GHQ-12, were perception and expectation of future financial situation and problems meeting household expenditure. Gender, age, marital status, number of children at home, highest qualification and job status were also significantly implicated. Unlike previous studies however we did not find that size of income was significant. These results provide further strong evidence of the impact that financial concerns have on self-reported measures of psychological well-being.
Highlights
Introduction and literatureThere is a growing body of evidence implicating personal financial circumstances (PFC’s) and factors influencing PFC’s as determinants of individual health ([1], [2], [3]).Some authors claim that this may be due to a number of indirect mechanisms and influences their impact on health are equivocal ([4], [5])
In choosing the best mode, preference was given on smaller Aikaike Information Criterion (AIC) values and fewer number of parameters to be estimated
The analysis suggests that, AGE, Financial situation now (FISIT), FISITX, XPHSDF, SEX, Marital status (MASTAT), Number of kids in the household (NKIDS), QFEDHI and Job status (JBSTAT) were significantly associated with General Health Questionnaire (GHQ)
Summary
There is a growing body of evidence implicating personal financial circumstances (PFC’s) and factors influencing PFC’s as determinants of individual health ([1], [2], [3]). Some authors claim that this may be due to a number of indirect mechanisms and influences their impact on health are equivocal ([4], [5]). Jones and Widman [5] suggest that these indirect mechanisms could constitute influences such as income inequality, relative deprivation, or other complex pathways.
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