MEASURES OF ECONOMIC WELL-BEING AS PREDICTORS OF PSYCHOLOGICAL WELL-BEING

This research indicates that a comprehensive measure of economic well-being based on permanent income, annuitized net worth, and household economic demands, performs better as a predictor of psychological well-being than conventional measures of economic well-being, particularly current reported income. Statistically, the results are significant yet the percentage of psychological well-being variance explained by the measures of economic well-being is very small. The average level of happiness varied only a small amount across quintile categories of each of the measures of economic well-being. That is to say, a substantial number of respondents in the lowest and next lowest quintiles of the measures of economic well-being expressed as high a level of happiness as respondents in the upper two quintiles of economic well-being.