Wealth and Subjective Well-Being in Germany

81 Pages Posted: 27 Apr 2022

See all articles by Antje Jantsch

Antje Jantsch

Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Julia Le Blanc

Deutsche Bundesbank; European Union - European Commission Joint Research Centre-Ispra

Tobias Schmidt

Deutsche Bundesbank - Research Center

Date Written: 2022

Abstract

Wealth in addition to income determines to a large degree an individual's consumption opportunities and economic situation, which should in turn affect their subjective well-being. We analyse empirically the relationship between life satisfaction as an indicator of subjective well being and households' wealth. We contribute to the scarce literature on wealth and well-being using micro-data from the German wealth survey, Panel on Household Finances - PHF, for 2010 and 2014. Using panel regression models, we find that (i) individuals' life satisfaction is statistically significant and positively associated with their households' wealth holdings, (ii) different components of wealth, such as real and financial assets, as well as debt, have differential effects on life satisfaction, (iii) both wealth levels and wealth holdings relative to other households matter for life satisfaction. Our study shows that it is important to consider wealth, in addition to income, when analysing individuals' life satisfaction.

Keywords: wealth, debt, assets, life satisfaction, relative wealth, subjective well-being

JEL Classification: I31, D19, D31

Suggested Citation

Jantsch, Antje and Le Blanc, Julia and Schmidt, Tobias, Wealth and Subjective Well-Being in Germany (2022). Deutsche Bundesbank Discussion Paper No. 11/2022, Available at SSRN: https://ssrn.com/abstract=4094558 or http://dx.doi.org/10.2139/ssrn.4094558

Antje Jantsch

Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Theodor-Lieser-Str.2
Halle, 06120
Germany

Julia Le Blanc

Deutsche Bundesbank

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

European Union - European Commission Joint Research Centre-Ispra

Via Fermi
Ispra, Varese 21027
Italy

Tobias Schmidt (Contact Author)

Deutsche Bundesbank - Research Center ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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