Title: Income and happiness: a study of a panel of US residents

Authors: Ling Zhang; Sajal Lahiri

Addresses: International College Beijing, China Agricultural University, University of Colorado Denver, 17 QingHua East Rd., Mailbox 94 Haidian District, Beijing, 100083, China ' School of Analytics, Finance and Economics, Southern Illinois University Carbondale, Carbondale, Illinois, 62901, USA

Abstract: Can money buy happiness? Does the marginal effect of income on happiness of an average change over time? Does the change in income of an average individual increase their happiness over time? These are the main research questions that this paper attempts to answer using a longitudinal dataset for US residents, viz., panel study of income dynamic (PSID), for the years 2019, 2011, 2013, 2015 and 2017. The main methodology we use is Ordered-Logit regressions. We find reasonably strong evidence of an yes answer to all three questions. Our results pass a number of robustness checks.

Keywords: Easterlin Paradox; happiness; income; ordered-logit regression; PSID data; longitudinal study.

DOI: 10.1504/IJHD.2025.144959

International Journal of Happiness and Development, 2025 Vol.9 No.1, pp.1 - 14

Received: 13 Aug 2023
Accepted: 29 Dec 2023
Published online: 14 Mar 2025 *

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