The Economic Analysis Of The Relationship Between Income And Happiness

Classical economic theory usually believes that increasing in income level could make consumers to reach a higher level of utility curve, and a higher degree of satisfaction. Thus more income will lead to more happiness. Since Easterlin, an increasing number of empirical researches on this topic presented a challenge for this prevailed theory. In the recent decades, the economists' interests on happiness have increased much. Researches on happiness have challenged on traditional economic theory and achieved many noticeable outcomes.Happiness is an interdisciplinary field involving economies, ethics, sociology, psychology and so on. The paper studies happiness under the view of economies, combining with the latest related findings from Psychology and behavior science, in order to do some empirical researches on the relationship between income and happiness of the residents in Shenzhen.First of all, this paper introduces concepts of happiness and income in economic perspective, and discussed the methods of the measurement of happiness and pointed that existing methods of measuring happiness are reliable and valid. Then the paper summarizes the current research results through making a general recall on the relationship of income and happiness. And then the author analyzes the income-happiness relationship in correlative economic theory. In the following part, in the empirical section, it has made a random sample survey in Shenzhen residents to collect the first-hand data for the happiness research. And the logistic regression analysis is executed to the survey data with SPSS 17.0(Chinese) of software effectively. The finding of research shows that the impact of the absolute value of income on happiness is not so strong as that people thought, but the relationship is very strong between the income satisfaction and happiness. So we found that income takes effect to happiness in other ways. Finally, this paper discusses the importance of studying happiness in our country, and provides a few relevant policy recommendations.