| Summary: | 碩士 === 國立臺北大學 === 財政學系 === 102 === Even in different countries and cultures, researchers have found that health, income, social connect and social interest are the main determinations of subjective well-being (SWB). It is said in economics textbooks that an individual with a higher income level certainly has a higher level of utility, but this argument is based on the measurement of absolute income. Alternatively, in addition to absolute income, growing literature has found that SWB is highly relative to relative income. This paper extensively examines how SWB depends on relative income that is measured by an income aspiration constructed by a comparison between one’s desired level of income and his actual income.
Using the data drawn from Taiwan Social Chang Survey and the empirical evidence of this study indicates that a higher level of income aspiration reduces an individual’s SWB. In other word, if an individual is more satisfied with his (her) income, the happier he (she) is. Moreover, this paper finds direct evidence that gender, age, education, and religion are strongly associated with the level of SWB.
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