Study on the Relationship between Residents' Income and Subjective Well-being (SWB) in Chinese Context

Qiance Qiu

doi:10.54691/bcpbm.v17i.385

Abstract

In recent years, the economic research on SWB has developed rapidly. A large number of academic achievements have emerged to explore the influencing factors of SWB. In view of this, this study has collated and reviewed the domestic and foreign literature on the relationship between income and SWB, and then summarized and commented on the impact of absolute income, relative income and income gap on SWB. The research results show that: in the context of China, absolute income and relative income have a positive impact on residents' Well-being in general, and income gap reduces residents' Well-being; Compared with absolute income, relative income exerts a greater impact on SWB; Compared with high-income groups, absolute income and relative income demonstrate a greater influence on the SWB of low-income groups. On this basis, this study has put forward specific policy proposals.

Highlights

Happiness is defined as utility in economics and subjective Well-being (SWB) in psychology (Tian & Yang, 2006)
Relative income has a greater impact on SWB than absolute income
Compared with the high-income groups, absolute income and relative income have a greater impact on the SWB of the low-income groups, and the effect of improvement is greater

Summary

Introduction

Happiness is defined as utility in economics and subjective Well-being (SWB) in psychology (Tian & Yang, 2006). The factors affecting SWB can be generalized as the following happiness function: H = f (P, E, I, ...) (Lu & Wang, 2010) In this formula, the explained variable H represents happiness (SWB), and the explanatory variable P stands for demographic sociological factors, including age, gender, race, health, marriage, educational level, religious beliefs, etc.; E for the economic factors, including absolute income, relative income, income inequality, unemployment, inflation, government expenditure, environmental pollution and urbanization, etc.; and I for social system conditions, such as direct democratic rights, degree of local autonomy, etc. One is from the aspects of psychological satisfaction, family life quality, health level, basic human rights, unemployment and inflation (Graham & Pettinato, 2002), to explore its impact on individual happiness level; Another one is to further explore the most important factor affecting SWB---income. The analysis and integration of the different research results in the context of China, and the induction and review of the impact on SWB from three aspects of absolute income, relative income and income gap, are helpful to better clarify the underlying logical relationship between income and SWB, and put forward targeted policy recommendations

Absolute Income and Subjective Well-being

Relative Income and Subjective Well-being

Income Gap and Subjective Well-being

Research Conclusions and Implications

Public Policies should Pay More Attention to Fairness