Abstract (via John KnightRamani Gunatilaka @ Oxford Via Ideas.Repec)
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.
Interesting Finding (via John KnightRamani Gunatilaka @ Oxford Via Ideas.Repec)
Another contribution comes from the evidence, in our data set as in many others, that subjective well-being is much influenced by relative income. Even rapid income growth need have little effect on perceived satisfaction if relative income remains constant. Moreover, the socioeconomic changes occurring in the process of China’s rapid economic growth, reform and marketization are likely to have played a part, including rapid urbanization, changing reference groups, increasing urban economic insecurity, and rising inequality (Knight et al., 2009, Knight and Gunatilaka, 2010a, 2010b).