Abstract
In this study, we examine whether the positive effect of income gains on subjective well-being (SWB) can in part be explained by the improved future prospects that are generated by a more solid financial situation. Using three-wave panel data from the US, we inspect the relation between changes in income, hope and SWB using a fixed-effects model. Results show that hope indeed partially mediates the relation between income and SWB, but only for monthly incomes over $1800. Positive expectations, on the other hand, mediate the relation for all income levels. From the two components of hope, agency, the belief that we can achieve our goals, seems to be the strongest mediator. We find no indications that extremely high levels of hope or expectations will harm SWB through disappointment.
Highlights
Do favourable life circumstances increase subjective well-being (SWB) because they increase positive expectations for the future? Or, in other words; would positive circumstances, such as a good income, a nice house or good friends, make us happy, if they did not give us the feeling that the future will be positive as well? Intuitively, it seems that we need at least some grounds to believe in a bright future in order to feel happy
We look at the link between income and SWB, and investigate whether this relation is mediated by hope, assuming that income adds to SWB at least partly because it helps people feel more hopeful about the future
Since the highest income-category for which we find no relation with hope ranges from $1300 to $1800 and the majority of the sample consists of households with more than one person, we can conclude that a large portion of people for whom we do not find a relation between income and hope, are living around or below the poverty threshold
Summary
Do favourable life circumstances increase subjective well-being (SWB) because they increase positive expectations for the future? Or, in other words; would positive circumstances, such as a good income, a nice house or good friends, make us happy, if they did not give us the feeling that the future will be positive as well? Intuitively, it seems that we need at least some grounds to believe in a bright future in order to feel happy. Negative circumstances can be deemed less detrimental if we expect improvement in the future; negative shocks will have a less profound effect if people are more optimistic; and optimists can cope with stressors more efficiently pessimists (Scheier and Carver 1992; Clark et al 2008; Fredrickson 2001; Green 2011; Arampatzi et al 2020).. Negative circumstances can be deemed less detrimental if we expect improvement in the future; negative shocks will have a less profound effect if people are more optimistic; and optimists can cope with stressors more efficiently pessimists (Scheier and Carver 1992; Clark et al 2008; Fredrickson 2001; Green 2011; Arampatzi et al 2020).1 This begs the question whether a part of the SWB created by our current circumstances is due to the positive hopes that they engender Negative circumstances can be deemed less detrimental if we expect improvement in the future; negative shocks will have a less profound effect if people are more optimistic; and optimists can cope with stressors more efficiently pessimists (Scheier and Carver 1992; Clark et al 2008; Fredrickson 2001; Green 2011; Arampatzi et al 2020). This begs the question whether a part of the SWB created by our current circumstances is due to the positive hopes that they engender
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