Income And Subjective Well-Being In Malaysia
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Date
2018-07
Authors
Boo, Mei Chin
Journal Title
Journal ISSN
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Publisher
Universiti Sains Malaysia
Abstract
Can money buy happiness? The income-happiness puzzle (Easterlin Paradox) points out that individuals with higher incomes are happier than people with lower incomes yet raising everyone’s income does not compensate with overall higher levels of happiness. This thesis aims to examine income and subjective well-being in Malaysia. The research focuses on two measures of subjective well-being – happiness and life satisfaction. Based on the wave 5 (2005-2009) and wave 6 (2010-2014) data obtained from the World Values Survey, this study addresses the issue of subjective well-being inequalities from different income groups. The survey was carried out in year 2006 for wave 5 and year 2011 for wave 6. People were happier and more satisfied in year 2011 compared to year 2006. However, over the same period, happiness and life satisfaction inequalities were found to be higher among the low-income group compared with the higher income groups. This study also examines the influence of absolute income, relative income and expected income on happiness and life satisfaction based on wave 6. Using the ordered logit regression analysis, it is found that higher absolute income contributes to greater happiness and satisfaction levels among Malaysians. In terms of the role of relative income on happiness, ‘tunnel effect’ is observed in particular among those in the low-income group. When compared with others who earn relatively higher income, Malaysians are less satisfied with life but the effect is found to be reversed in their happiness levels. Higher expected income seems to generate greater satisfaction among Malaysians. Other factors such as health, employment, religiosity, trust and democracy do influence Malaysian happiness and life satisfaction. To rule out that the findings could be influenced by how important variables such as income and subjective well-being are being measured, a case study was conducted based on a sample of 249 undergraduate students at the School of Distance Education, University of Science Malaysia. The case study also examines the life satisfaction of Malaysians from different domains and makes comparison on factors that contribute to different domain of life satisfaction. The methods used in the study are factor analysis and multiple regression analysis. The three main domains of life satisfaction identified based on factor analysis are: materialism, post-materialism and public sector dominance. It is found that household income and expected income influence life satisfaction from the materialism dimension but not the post-materialism and public sector dominance dimensions.
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Keywords
Finance management