Week 7: can money buy happiness - literature

Question 1

What is the difference between the relative income view and the absolute income view

Answer 1

relative income = what can someone actually afford given inflation and so forth
Absolute income = what is someones actual income regardless of prices

Question 2

In which view of income (symbolic or functional) does money have a positive effect on SWB

Answer 2

symbolic = money as demonstration of social standing; no positive effect on SWB
Functional = buffer and means to obtain goods, positive effect on swb

Question 3

What is the status effect of money?

Answer 3

More income leads to more aspirations

Question 4

What are 3 negative effects of more income and ultimately standing in the way of improving happiness?

Answer 4

(1) Status effect
(2) Changes in social referents used for benchmarking
(3) Raising the standards, being less quickly satisfied

Question 5

What can be said about the national level relationship between income and subjective well-being?

Answer 5

Income predicts subjective well-being but not the other way around

Question 6

When is spent money most likely to maintain its positive effect?

Answer 6

when its being spent on need fulfillment

Question 7

What can be said about the national level relationship between income distribution and SWB? (2)

Answer 7

(1) Perceived income inequality leads to lower life satisfaction
(2) greater progressive taxation is related to higher life satisfaction