Work detail

The Importance of Income on Subjective Well-being

Author: Bc. Jan Sedlář
Year: 2011 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Consultants:
Work type: Bachelors
Language: Czech
Pages: 45
Awards and prizes:
Link:
Abstract: My Bachelor thesis deals in a comprehensive way with the discussion unleashed
by the publication of the Easterlin´s article which called attention to more complex
relations between the absolute level of income and the subjective well-being than the
economic theory would ever assume .
There is the literature shown which finds the explanation why the relation – the
absolute level of income and the subjective well-being – does not hold without
exceptions. A special attention is devoted to the human behaviour: comparison of the
individual´s situation with the situation of his reference group, comparison of the
individual´s situation with the situation he was accustomed to in the past, the
individual´s adaptation to the new situation and change of his aspiration and on the
overvaluation of the benefits from the achieved goal. The first characteristic is tested
experimentally with use of the analogy: the income as the evaluation of the job
performance, the mark as the evaluation of the student. The experiment did not prove
that the comparison of the student with his reference group would have the influence on
his own performance.
The second part of my thesis is focused on the description of the relationship
between the gross national income per capita and the satisfaction of the inhabitants from
the given country. It has been examined how the influence of gross national income
differs across the countries based on their economic development. It has been also
discussed whether in the more rich countries the importance of the income falls as the
factor influencing the happiness of people. This kind of development is forecast in the
second and the third Easterlin´s conclusion. The regression of the collected data from 28
European states between 2004 and 2009 is rather in accord with these assumptions.

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