The Nonlinear Effect of Income on Subjective Well-being: A Quantile Regression Approach

The effect of income on subjective well-being has been studied in several researches; however, the various dimensions of this effect have not been studied yet. Therefore, the aim of this study is to investigate the nonlinear effects of income on subjective well-being of 58 selected countries during the years 2005 to 2020 using quantile regression approach. In this study, the effects of income, unemployment, inflation, life expectancy, and income inequality on subjective well-being have also been investigated. The results show that in all quantities, there is a positive and significant relationship between income and subjective well-being. Considering different deciles of subjective well-being, however, the effect of income on subjective well-being is greater at higher levels of subjective well-being. From the middle onwards, this value is almost constant. In fact, with an unlimited increase in the subjective well-being, countries are unable to increase the amount of positive impact of income on it. According to the results, the impact of the economic factors on subjective well-being is importan, so that a high subjective well-being affects the amount of impact.