Does Money Buy Satisfaction?

Abstract

There was no change in the distribution of satisfaction with the standard of living among Detroit area wives between 1955 and 1971, although current-dollar median family income more than doubled and constant-dollar income increased by forty per cent. Cross-sectional variation in satisfaction is, however, related to income and, in particular, to relative position in the income distribution. Whereas regressions of satisfaction on income in current or constant dollars, or the logarithm thereof, suggest that at the same income there was less satisfaction in 1971 than in 1955, there is no significant year effect in the equation using the income-position variable. Easterlin’s thesis that rising levels of income do not produce rises in the average subjective estimate of welfare is supported. The thesis raises difficult questions for students of subjective social indicators.