Income and Subjective Well-being: Test of a Multilevel Moderated Mediation Model

Is the Easterlin paradox lost, or has it been regained? Scholars have started to debate this topic in recent years. This paper explores the association between income and happiness in cities with different levels of economic development, which provides new evidence for the Easterlin paradox. 11,791 participants from 32 cities reported their absolute income (real income), relative income (subjective evaluation of their family’s economic status), and subjective well-being (SWB). We also obtained the total gross domestic product (GDP) of each city from the Urban Statistical Yearbook as an indicator of regional economic development level. We applied the MLmed macro in SPSS to test the multilevel moderated mediation model. The results show that individual absolute income has significant predictive effects on relative income and SWB, and that relative income play a mediating role on the association between absolute income and SWB. Moreover, GDP moderates the association between absolute income and SWB, and the association between absolute income and SWB is stronger in cities with higher GDP. In addition, GDP moderates the relationship between absolute income and relative income, and the relationship between absolute income and relative income is stronger in cities with lower GDP. Furthermore, GDP moderates the mediating effect between absolute income and SWB not only at the individual level but also at the city level. The insights gained in this study may facilitate a more detailed understanding of the relation between income and SWB, and provide advice for individuals and governments.