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Subjective Well-Being And Income: Is There Any Evidence Of Satiation?

Betsey Stevenson, Justin Wolfers

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Many scholars have argued that once “basic needs” have been met, further rises in income are not associated with further increases in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of “basic needs” and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly log-linear and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.