Abstract
Conventional wisdom holds that money has little relevance to happiness. This review will demonstrate quite the opposite is true and will argue that case using the Homeostatic Theory of Subjective Well-Being (SWB). Homeostatic theory proposes that SWB is held within a narrow range determined by personality. Experience with the environment also impacts on this system but its influence is attenuated by two sets of buffers. The internal buffers comprise beliefs in perceived control, self-esteem, and optimism. The external buffers comprise resources, such as personal assistance, that ameliorate the impact of potentially negative events. This model predicts significantly different levels of SWB for people who are rich, people on average Western incomes, and people who are poor. Data are provided that support this prediction. It is concluded that money buys happiness to the extent that external resources permit optimal functioning of the SWB homeostatic system.
Similar content being viewed by others
REFERENCES
Abrams, M.: 1973, 'Subjective social indicators', Social Trends 4, pp. 35-50.
Ahuvia, A.C. and D.C. Friedman: 1998, 'Income, consumption and subjective wellbeing: Toward a composite macromarketing model', Journal of Macromarketing 18, pp. 153-168.
Andrews, F.M.: 1991, 'Stability and change in levels and structure of subjective wellbeing: USA 1972 and 1988', Social Indicators Research 25, pp. 1-30.
Aryee, S., V. Luk, A. Leung and S. Lo: 1999, 'Role stressors, interrole conflict, and well-being: The moderating influence of spousal support and coping behavior among employed parents in Hong Kong', Journal of Vocational Behavior 54, pp. 259-278.
Bach, C.A. and R.W. McDaniel: 1993, 'Quality of life in quadriplegic adults: A focus group study', Rehabilitation Nursing 186, pp. 364-367.
Balatsky, G. and E. Diener: 1993, 'Subjective well-being among Russian students', Social Indicators Research 28, pp. 225-243.
Barrett, L.F. and J.A. Russell: 1999, 'The structure of current affect: Controversies and emerging consensus', Psychological Science 8, pp. 10-14.
Bendo, A.A. and H. Feldman: 1974, 'Acomparison of the self-concept of low-income women with and without husbands present', Cornell Journal of Social Relations 91, pp. 53-85.
Bookwala, J., I. Frieze and N. Grote: 1994, 'The long-term effects of military service on quality of life: The Vietnam experience', Journal of Applied Social Psychology 246, pp. 529-545.
Bortner, R.W. and D.F. Hultsch: 1970, 'A multivariate analysis of correlates of life satisfaction in adulthood', Journal of Gerontology 25(1), pp. 41-47.
Boschen, K.A.: 1990, 'Life satisfaction, housing satisfaction, and locus of control: A comparison between spinal cord injured and non-disabled individuals', Canadian Journal of Rehabilitation 4(2), pp. 75-85.
Boschen, K.A.: 1996, 'Correlates of life satisfaction, residential satisfaction, and locus of control among adults with spinal cord injuries', Rehabilitation Counseling Bulletin 39, pp. 230-243.
Bowling, A., M. Farquhar and P. Browne: 1991, 'Life satisfaction and associations with social network and support variables in three samples of elderly people', International Journal of Geriatric Psychiatry 6, pp. 549-566.
Brickman, P., D. Coates and R. Janoff-Bulman: 1978, 'Lottery winners and accident victims: Is happiness relative?', Journal of Personality and Social Psychology 36(8), pp. 917-927.
Broman, C.L.: 1988, 'Satisfaction among Blacks: The significance of marriage and parenthood', Journal of Marriage and the Family 50, pp. 45-51.
Buchanan, W. and H. Cantril: 1953, How Nations See Each Other(University of Illinois Press, Urbana).
Cameron, P.: 1972, 'Stereotypes about generational fun and happiness vs. selfappraised fun and happiness', The Gerontologist 12, pp. 120-190.
Cameron, P., D.G. Titus, J. Kostin and M. Kostin: 1973, 'The life satisfaction of nonnormal persons', Journal of Consulting and Clinical Psychology 41(2), pp. 207-214.
Campbell, A., P.E. Converse and W.L. Rodgers: 1976, The Quality of American Life: Perceptions, Evaluations, and Satisfactions (Russell Sage Foundation, New York).
Carpenter, J.S.: 1997, 'Self-esteem and well-being among women with breast cancer and women in an age-matched comparison group', Journal of Psychosocial Oncology 15, pp. 59-80.
Chambers, R.: 1997, 'Editorial: Responsible well-being — A personal agenda for development', World Development 25(11), pp. 1743-1754.
Cummins, R.A.: 1995, 'On the trail of the gold standard for life satisfaction', Social Indicators Research 35, pp. 179-200.
Cummins, R.A.: 1996, 'The domains of life satisfaction: An attempt to order chaos', Social Indicators Research 38, pp. 303-332.
Cummins, R.A.: 1998, 'The second approximation to an international standard for life satisfaction', Social Indicators Research 43, pp. 307-334.
Cummins, R.A.: 2000a, 'Objective and subjective quality of life: An interactive model', Social Indicators Research (in press).
Cummins, R.A.: 2000b, 'Normative life satisfaction: Measurement issues and a homeostatic model', in B. Zumbo (ed.), Methodological Developments and Issues in Quality of Life Research. (Kluwer, Amsterdam), in press.
Cummins, R.A.: 2000c, 'The subjective well-being of people caring for a severely disabled family member at home: A review' (submitted for publication).
Cummins, R.A. and H. Nistico: 2000, 'Maintaining subjective well-being and avoiding depression: The role of cognitive illusions' (submitted for publication).
Diener, E., J. Horwitz and R.A. Emmons: 1985, 'Happiness of the very wealthy', Social Indicators Research 16, pp. 263-274.
Diener, E., E. Sandvik, L. Seidlitz and M. Diener: 1993, 'The relationship between income and subjective well-being: Relative or absolute', Social Indicators Research 28, pp. 195-223.
Diener, E., E.M. Suh, R.E. Lucas and H.L. Smith: 1999, 'Subjective well-being: Three decades of progress', Psychological Bulletin, in press.
Dillard, J.M., N.J. Campbell and B. Chisolm: 1984, 'Correlates of life satisfaction of aged persons', Psychological Reports 54, pp. 977-978.
Eckersley, R.: 1997, 'Understanding young people's relationship with the future', Futures 29, pp. 243-249.
Edwards, J.N. and D.L. Klemmack: 1973, 'Correlates of life satisfaction: a re-examination', Journal of Gerontology 28, pp. 497-502.
Feather, N.T.: 1989, 'Reported changes in behaviour after job loss in a sample of older unemployed men', Australian Journal of Psychology 41, pp. 175-185.
Ferrans, C.E. and M.J. Powers: 1985, 'The employment potential of hemodialysis patients', Nursing Research 34, pp. 273-277.
Glatzer, W.: 1991, 'Quality of life in advanced industrialized countries: The case of West Germany', in F. Strack, M. Argyle and N. Schwarz (eds.), Subjective Well-Being: An Interdisciplinary Perspective (Plenum Press, New York), pp. 261-279.
Griffiths, K.A., O.W. Farley, W.P. Dean and L.L. Boon: 1973, 'Socioeconomic class and the disadvantaged senior citizen', in R.F. Morland (ed.), Retirement and the future. (WAIT Press, Australia). pp. 92-101.
Harris, L. and Associates: 1975, 'The myth and reality of aging in America', Washington: The National Council on the aging, Inc.
Hartog, J. and H. Oosterbeek: 1998, 'Health, wealth and happiness: Why pursue a higher education?', Economics of Education Review 17, pp. 245-256.
Headey, B. and A. Wearing: 1992, Understanding Happiness: A Theory of Subjective Well-Being ( Longman Cheshire, Melbourne).
Jacob, J.C. and M.B. Brinkerhoff: 1999, 'Mindfulness and subjective well-being in the sustainability movement: A further elaboration of multiple discrepancies theory', Social Indicators Research 46, pp. 341-368.
Judge, T.A. and E.A. Locke: 1993, 'Effect of dysfunctional thought processes on subjective well-being and job satisfaction', Journal of Appled Psychology 7, pp. 475-490.
Judge, T.A. and S. Watanabe: 1993, 'Another look at the job satisfaction-life satisfaction relationship', Journal of applied Psychology 78, pp. 939-948.
Kelley, J. and M.D.R. Evans: 1996, Step-Parenting in Australia, 1995, (Worldwide Attitudes, 19960429).
King, L.A. and C.K. Napa: 1998, 'What makes a life good?', Journal of Personality and Social Psychology 751, pp. 156-165.
Kinney, W.B. and C.P. Coyle: 1992, 'Predicting life satisfaction among adults with physical disabilities', Archives of Physical Medicine and Rehabilitation 73, pp. 863-869.
Kokko, K. and L. Pulkkinen: 1998, 'Unemployment and psychological distress: Mediator effects', Journal of Adult Development 5, pp. 205-217.
Krebs, D. and P. Schmidt: 1995, 'Correction for measurement error in a satisfaction with life study', in W.E. Saris and A. Munnich (eds.), The Multitrait-Multimethod Approach to Evaluate Measurement Instruments (Eotvos University Press, Budapest), pp. 269-280.
LaBarbera, P.A. and Z. GÜrhan: 1997, 'The role of materialism, religiosity, and demographics in subjective well-being', Psychology and Marketing 14, pp. 71-97.
Larson, R.: 1978, 'Thirty years of research on the subjective well-being of older Americans', Journal of Gerontology 33, pp. 109-125.
Lebo, D.: 1953, 'Some factors said to make for happiness in old age', Journal of Clinical Psychology 9, pp. 385-387.
Li, L., D. Young, H. Wei, Y. Zhang, Y. Zheng, S. Xiao, X. Wang and X. Chen: 1998, 'The relationship between objective life status and subjective life satisfaction with quality of life', Behavioral Medicine 23, pp. 149-160.
Lu, L. and J.B. Shih: 1997, 'Personality and happiness: Is mental health a mediator?' Personality and Individual Differences 22, pp. 249-256
Lussier, Y., S. Sabourin and C. Turgeon: 1997, 'Coping strategies as moderator of the relationship between attachment and marital adjustment', Journal of Social and Personal Relationships 14, pp. 777-791.
Maslow, A.: 1943, 'A theory of human motivation', Psychological Review 50, pp. 370-396.
Mercier, C., N. Peladeau and R. Tempier: 1998, 'Age, gender and quality of life', Community Mental Health Journal 34, pp. 487-500.
Møller, V.: 1988, 'Quality of life in retirement: A case study of Zulu return migrants', Social Indicators Research 20, pp. 621-658.
Mookherjee, H.N.: 1997, 'Perception of well-being among older persons in nonmetropolitan America', Perceptual and Motor Skills 85, pp. 943-946.
Mullis, R.J.: 1992, 'Measures of economic well-being as predictors of psychological well-being', Social Indicators Research 26, pp. 119-135.
Ng, Y.K.: 1997, 'A case for happiness, cardinalsim, and interpersonal comparability', The Economic Journal 107, pp. 1848-1858.
Palmore, E. and C. Luikart: 1972, 'Health and social factors related to life satisfaction', Journal of Health and Social Behavior 13, pp. 68-80.
Pollner, M.: 1989, 'Divine relations, social relations, and well-being', Journal of Health and Social Behaviour 30, pp. 92-104.
Riddick, C.C. and S.N. Daniel: 1984, 'The relative contribution of leisure activities and other factors to the mental health of olderwomen', Journal of Leisure Research 16, pp. 136-148.
Schkade, D.A. and D. Kahneman: 1998, 'Does living in California make people happy? A focusing illusion in judgements of life satisfaction', Psychological Science 95, pp. 340-346.
Schulz, R. and S. Decker: 1985, 'Long-term adjustment to physical disability: The role of social support, perceived control, and self-blame', Journal of Personality and Social Psychology 48, pp. 1162-1172.
Shin, D.C. and D.M. Johnson: 1978, 'Avowed happiness as an overall assessment of the quality of life', Social Indicators Research 5, pp. 475-492.
Shmotkin, D., J. Lomranz, N. Eyal and M. Zemach: 1999, 'The contribution of personal resources to physical and mental health: Looking into age and gender effects', Genetic, Social, and General Psychology Monographs 125, pp. 5-25.
Silveira, E.R. and S. Ebrahim: 1998, 'Social determinants of psychiatric morbidity and well-being in immigrant elders and whites in East London', International Journal of Geriatric Psychiatry 13, pp. 801-812.
Spreitzer, E. and E.E. Snyder: 1974, 'Correlates of life satisfaction among the aged', Journal of Gerontology 29, pp. 454-458.
Staudinger, U.M., P.B. Baltes and W. Fleeson: 1999, 'Predictors of subjective physical health and global well-being: Similarities and differences between the United States and Germany', Journal of Personality and Social Psychology 76, pp. 305-319.
Sullivan, G., K.B. Wells and B. Leake: 1992, 'Clinical factors associated with better quality of life in a seriously mentally ill population', Hospital and Community Psychiatry 43, pp. 794-798.
Tran, T.V., R. Wright and L. Chatters: 1991, 'Health, stress, psychological resources, and subjective well-being among older blacks', Psychology and Aging 6, pp. 100-108.
Veenhoven, R.: 1996, 'Developments in satisfaction-research', Social Indicators Research 37, pp. 1-46.
Watson, D., L.A. Clark and A. Tellegen: 1988, 'Development and validation of brief measures of positive and negative affect: The PANAS scales', Journal of Personality and Social Psychology 54, pp. 1063-1070.
Yerxa, E.J. and S. Baum: 1998, 'Engagement in daily occupations and life satisfaction among people with spinal cord injuries', Occupational Therapy Journal of Research 6, pp. 273-283.
Zautra, A.J.: 1983, 'Social reasons and the quality of life', American Journal of Community Psychology 11, pp. 275-290.
Rights and permissions
About this article
Cite this article
Cummins, R.A. Personal Income and Subjective Well-being: A Review. Journal of Happiness Studies 1, 133–158 (2000). https://doi.org/10.1023/A:1010079728426
Issue Date:
DOI: https://doi.org/10.1023/A:1010079728426