Abstract
This paper aims to untangle the relationship between income and subjective well-being. To accomplish this, we investigate
how subjective well-being is affected by two financially-related determinants that have not been investigated before or scarcely
so. Specifically, we research the impact on subjective well-being of how people are coping with their present income as well
as of their borrowing constraints. The results indicate that both variables determine subjective well-being and that they
mediate the effects of other variables, namely income, which is not directly related to well-being. Additionally, they signal
that income matters to the extent to which it contributes to meeting the desired consumption needs and eases borrowing constraints.
Such mediating effects thus contribute to explain how income affects subjective well-being. We also inspect differences in
life satisfaction responsiveness to perceived income adequacy and borrowing constraints in certain groups of individuals,
and find that the subjective well-being of individuals in a more fragile financial position is particularly responsive to
the alleviation of borrowing constraints.
how subjective well-being is affected by two financially-related determinants that have not been investigated before or scarcely
so. Specifically, we research the impact on subjective well-being of how people are coping with their present income as well
as of their borrowing constraints. The results indicate that both variables determine subjective well-being and that they
mediate the effects of other variables, namely income, which is not directly related to well-being. Additionally, they signal
that income matters to the extent to which it contributes to meeting the desired consumption needs and eases borrowing constraints.
Such mediating effects thus contribute to explain how income affects subjective well-being. We also inspect differences in
life satisfaction responsiveness to perceived income adequacy and borrowing constraints in certain groups of individuals,
and find that the subjective well-being of individuals in a more fragile financial position is particularly responsive to
the alleviation of borrowing constraints.
- Content Type Journal Article
- Category Research Paper
- Pages 1-21
- DOI 10.1007/s10902-012-9365-z
- Authors
- Maria C. Pereira, Faculdade de Economia da Universidade de Coimbra/GEMF, Av. Dias da Silva 165, 3004-512 Coimbra, Portugal
- Filipe Coelho, Faculdade de Economia da Universidade de Coimbra/GEMF, Av. Dias da Silva 165, 3004-512 Coimbra, Portugal
- Journal Journal of Happiness Studies
- Online ISSN 1573-7780
- Print ISSN 1389-4978