Abstract (may include machine translation)
The paper examines the relationship between subjective well-being and income. The empirical studies on subjective well-being pointed out that satisfaction with life depends not only on absolute but relative position as well. Comparing ourselves with others (interpersonal reference point) and with our past income (intrapersonal reference point) is important in determining individual satisfaction beside absolute income. The increase of the reference group's income has two different impacts on subjective well-being. Because of the decrease of the social status satisfaction is lower (status effect), on the other hand in an unpredictable, volatile environment an increase in the income of the reference group provides information about the prospect of the future earnings, so it increases satisfaction with life (signal effect). Our analysis on Hungarian data shows that the relative income is an important factor in determining life satisfaction. When comparing ourselves with others of the same social status the signal effect is more dominant than the status effect. When the social distance between the individual and her reference group grows the signal effect gets less significant, and the status effect becomes the more determining factor.
Original language | Hungarian |
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Pages (from-to) | 83-106 |
Number of pages | 24 |
Journal | Szociológiai Szemle |
Volume | 21 |
Issue number | 3 |
State | Published - 2011 |