Happiness, Personal Income, and National Income: New Evidence from Taiwan
22 Pages Posted: 12 Dec 2016 Last revised: 21 Apr 2017
Date Written: April 20, 7
This study explores the relationship between income and happiness using data from Taiwan. It also proposes a two-stage estimation method for studying the macroeconomics of happiness. The study finds that while personal income has a strong positive effect on individual happiness, national income fails to have any significant effect in either the short run or the long run. This finding agrees with the Easterlin paradox, and suggests that good macroeconomic conditions do not notably improve happiness for an individual even in the short run.
Keywords: Happiness; Personal Income; National Income; Taiwan; Probit; Two-Stage Estimation
JEL Classification: I31; D63; C23
Suggested Citation: Suggested Citation