HOME » Publications » Economic Review

Abstract

Vol. 63, No. 1, pp. 42-55 (2012)

“Relative Income and Subjective Well-being in Japan —Perceived Happiness, Self-Rated Health, and Trust—”
Takashi Oshio (Institute of Economic Research, Hitotsubashi University), Kunio Urakawa (Graduate School of Economics, Kyushu University)

The relative income hypothesis argues that subjective well-being, such as perceived happiness and self-rated health, is affected not only by the absolute level of own income but also by comparisons of income with others. In this study, we examined the extent to which this hypothesis holds in Japan, using the micro data collected from a nationwide internet survey. By defining the reference groups in terms of gender, age, and educational attainment, we examined the association of perceived happiness, self-rated health, and trust with relative income within each reference group. The estimation results were generally supportive of the hypothesis.