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Income Status and Life Satisfaction

FitzRoy, Felix R.; Nolan, Michael A.

Authors

Felix R. FitzRoy

Dr Michael Nolan M.A.Nolan@hull.ac.uk
Senior Lecturer in Economics and Programme Director, BSc Economics and BA Business Economics



Abstract

The importance of both income rank and relative income, as indicators of status, has long been recognised in the literature on life satisfaction and happiness. Recently, several authors have made explicit comparisons of the relative importance of these two measures of income status, and concluded that rank dominates to the extent that reference income becomes insignificant in regressions including both these explanatory variables, and that even absolute or household income, otherwise always positively related to happiness, may lose statistical significance. Here we test this hypothesis with a large UK panel (British Household Panel Survey and Understanding Society) for 1996–2017, split by age and retirement status, and find, contrary to previous results, that rank, household income and reference income are all usually important explanatory variables, but with significant differences between subgroups. This finding holds when rank is in its often-used relative form, and also with absolute rank.

Citation

FitzRoy, F. R., & Nolan, M. A. (2021). Income Status and Life Satisfaction. Journal of Happiness Studies, 23, 233–256. https://doi.org/10.1007/s10902-021-00397-y

Journal Article Type Article
Acceptance Date Apr 12, 2021
Online Publication Date May 11, 2021
Publication Date 2021
Deposit Date Feb 4, 2022
Publicly Available Date Oct 27, 2022
Journal Journal of Happiness Studies
Print ISSN 1389-4978
Electronic ISSN 1573-7780
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 23
Pages 233–256
DOI https://doi.org/10.1007/s10902-021-00397-y
Keywords Life satisfaction ; Income rank; Relative income
Public URL https://hull-repository.worktribe.com/output/3774976

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Copyright Statement
© The Author(s) 2021.
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.







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