Income, aspirations and the Hedonic Treadmill in a poor society

John B Knight, Ramani Sonali Gunatilaka

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Abstract

A specially designed household survey for rural China is used to analyse the determinants of aspirations for income, proxied by reported minimum income need, and the determinants of subjective well-being, both satisfaction with life and satisfaction with income. It is found that aspiration income is a positive function of actual income and reference income, and that subjective well-being is raised by actual income but lowered by aspiration income. These findings suggest the existence of a partial Hedonic Treadmill , and can help to explain why subjective well-being in China appears not to have risen despite rapid economic growth.
Original languageEnglish
Pages (from-to)67 - 81
Number of pages15
JournalJournal of Economic Behavior and Organization
Volume82
Issue number1
DOIs
Publication statusPublished - 2012

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