A specially designed household survey for rural China is used to analyse the determinants of aspirations for income, proxied by reported minimum income need, and the determinants of subjective well-being, both satisfaction with life and satisfaction with income. It is found that aspiration income is a positive function of actual income and reference income, and that subjective well-being is raised by actual income but lowered by aspiration income. These findings suggests the existence of a partial hedonic treadmill, and can help to explain why subjective well-being in China appears not to have risen despite rapid economic growth.
Source: “Income, Aspirations and the Hedonic Treadmill in a Poor Society” from University of Oxford, Department of Economics, Working Papers #468.
Quick and dirty, in English:
- How much money you make vs how much your friends make determines how much money you desire to make.
- How much money you make increases happiness. How much money you want to make lowers happiness.
- Wanna be happy? Focus on what you have.
- Wanna be miserable? Increase your wants and desires.
- Comparing what you have to what others have is probably going to lead to unhappiness.