The Relationship Between Income and Subjective Well-Being: Relative or Absolute?

Ed Diener, Ed Sandvik, Larry Seidlitz and Marissa Diener

Theory

This report consisted of two studies, only one of which this review will cover. This study calls into question various theories on relative relationships between income and “subjective well being” which the authors use interchangeably with “happiness” to determine if the realitionship is either relative to various influences or more absolute in nature. These four different theories test the relative nature of the relationship between income and happiness through various forms such as expectancy of income, social comparison within countries, inborn needs and changes in income (pg. 200-201) While the importance of this study is not directly articulated by the authors, the conceptual framework and connection to previous theory and research is explicit, thus indirectly articulating the importance and need for further study and clarification of the existing theories and their presumptions. 

Research Design

The researchers take on a design based on a larger longitudinal sample size and quantiative data resulting from an anlysis of reliable measurement methods, provided by Fazio in 1977 (pg. 202) and secondary data from several U.S. Health agencies in 1983. This design, is sufficient in filling the gaps left by previous studies, but leaves something to be desired for modern standards as the Fazio measurement of happiness may be outdated.The authors also present detailed statistical operations and understandable tables for that data (pg. 203-204) that correlate with their resulting implications. The only major drawbacks to the procedure are 1) the use of median income categorical ranges as opposed to specific income for each individual as these decreases the degree of specificity and 2) ignoring the weight of non-income based factors over income when an individual self-assesses their happiness because individuals may put greater weight on factors other than income when describing their own well-being.

Interpretation and Implications of the Results

These drawbacks as well as the authors reference to the shortcomings of the study, without articulating what they feel those shortcomings are, leave something to be desired. Despite these issues however, the combination of reliable contextual measurements, procedures and analysis with clear articulation of the theories at hand and the need for further clarification of their consistency and reliability, leads the authors to accurately conclude that the relationship between income and subjective well-being is more absolute than it is relative to the variables described in the theories being questioned (pg 211-212).