Subjective Well-Being and Income: Is There Any Evidence of Satiation?
AbstractMany scholars have argued that once "basic needs" have been met, further rises in income are not associated with further increases in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of "basic needs" and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly log-linear and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.
CitationStevenson, Betsey, and Justin Wolfers. 2013. "Subjective Well-Being and Income: Is There Any Evidence of Satiation?" American Economic Review, 103 (3): 598-604. DOI: 10.1257/aer.103.3.598
- E23 Macroeconomics: Production
- I31 General Welfare