Essays on the Relationship between Income and Subjective Well-Being

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Main building, auditorium A1, address: Kalevantie 4.


Doctoral defence of M.Sc. (Econ. & Bus. Adm.) Matti Hovi

Essays on the Relationship between Income and Subjective Well-Being

The field of science of the dissertation is Economics.

The opponent is professor Conchita D’Ambrosio (University of Luxembourg, Luxemburg). Professor Jani-Petri Laamanen acts as the custos.

The language of the dissertation defence is English.

Essays on the Relationship between Income and Subjective Well-Being

This PhD thesis examines the relationship between economic growth (income growth) and subjective well-being (SWB). The measures used for SWB are individuals’ self-reported happiness and life satisfaction. Data sets used are Eurobarometer, World Values Survey and German Socio Economic Panel.

The focus of the dissertation is on the time series relationship between SWB and GDP (or individual level income). For example, one of the research questions asks how average SWB within a country is associated with GDP changes in the short-run and in the long run.

The results from the first essay show that SWB is associated with cyclical fluctuations in economic output but not with the long-run trend growth. The positive relationship between economic output and SWB found in previous studies is not due to long-run economic growth.

The results from the second essay indicate that in European countries, on average, GDP decreases are associated with long lasting falls in SWB while GDP increases are not associated with long lasting increases in SWB. The average SWB adapts to increases in GDP but adaptation to GDP decreases seems to be much harder.

The third essay uses longitudinal individual level data from West Germany to study the effects of positive and negative income changes. According to the results, there is no significant differences in the effects of positive and negative changes on SWB.

The fourth essay examines the effects of macroeconomic crises experienced in early adulthood (ages 18-25) on subjective well-being later in life. Results indicate that severe downturns experienced in early adulthood have long lasting negative impacts on individuals’ SWB.


The dissertation is published in the publication series of Acta Universitatis Tamperensis; 2427, Tampere University Press, Tampere 2018. The dissertation is also published in the e-series Acta Electronica Universitatis Tamperensis; 1937, Tampere University Press 2018.

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