The Effects of Income on Happiness in East and South Asia: Societal Values Matter?

  • Hock-Eam LimEmail author
  • Daigee Shaw
  • Pei-Shan Liao
  • Hongbo Duan
Research Paper


During the last two decades, economic studies on happiness have grown rapidly in particular, studies on the effect of income on happiness. Ng (Pac Econ Rev 7(1):51–63, 2002) has highlighted the East-Asian happiness gap. The East Asian countries, China, Hong Kong, Taiwan, Korea, Japan, Singapore, are performing well economically, however, performing poorly in happiness. Societal values have been suggested to be the potential explanation of this happiness gap. Nevertheless, the effects of societal values on happiness are yet to be explored fully. This paper aims to estimate the effect of income on happiness and examine the moderating effect of societal values in the context of the East-Asian happiness gap using the World Values Survey (WVS) data. The WVS (waves 6, 2010–2014) consists of nationally representative sample of 14,447 respondents from the various East and South Asian countries. It provides measurements of societal values, subjective well-being and other socio-demographic variables including income. We found that the effect of income on happiness is the lowest (and insignificant) in Thailand and Philippines; and the highest (and strongly significant) in South Korea and Taiwan. The effect of income becomes insignificant once it is moderated by the societal values. Societal values matter to explain the East-Asian happiness gap and might refute the relevance of Easterlin paradox.


East-Asian happiness gap Societal values Income-happiness effect Easterlin paradox 

JEL Classification

A12 A13 



First of all, we would like to thank the financial support of the Taiwan Fellowship Program (Ministry of Foreign Affairs, Republic of China (Taiwan)). We also thank to the World Values Survey Association (WVS) for permission to use its data, the Institute of Economics, Academia Sinica (Taipei, Taiwan), Universiti Utara Malaysia (UUM, Malaysia) and the seminar participants whose comments have improved this paper substantially. Thank is also due to the anonymous referees whose comments have improved this paper substantially.


  1. Angeles, L. (2011). A closer look at the Easterlin Paradox. Journal of Socio-Economics, 40, 33–67.CrossRefGoogle Scholar
  2. Arrindell, W. A., Hatzichristou, C., Wensink, J., Rosenberg, E., van Twillert, B., Stedema, J., et al. (1997). Dimensions of national culture as predictors of cross-national differences in subjective well-being. Personality and Individual Differences, 23(1), 37–53.CrossRefGoogle Scholar
  3. Bohnke, P. (2008). Does society matter? Life satisfaction in the enlarged Europe. Social Indicators Research, 87, 189–210.CrossRefGoogle Scholar
  4. Boo, M. C., Yen, S. H., & Lim, H. E. (2016). A note on happiness and life satisfaction in Malaysia. Malaysian Journal of Economic Studies, 53(2), 261–277.Google Scholar
  5. Chophel, S. (2012). Culture, public policy and happiness. Journal of Bhutan Studies, 26, 82–99.Google Scholar
  6. Clark, A. E., Frijters, P., & Shields, M. A. (2008). Relative income, happiness, and utility: An explanation for the Easterlin Paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.CrossRefGoogle Scholar
  7. Cohen, J., Cohen, P., Leona, S., & West, H. S. (2003). Applied multiple regression/correlation analysis for the behavioral sciences. Hillsdale, NJ: Erlbaum Associates.Google Scholar
  8. Di Tella, R., & MacCulloch, R. (2008). Gross national happiness as an answer to the Easterlin Paradox? Journal of Development Economics, 86(1), 22–42.CrossRefGoogle Scholar
  9. Diener, E. (1984). Subjective well-being. Psychological Bulletin, 95, 542–575.CrossRefGoogle Scholar
  10. Easterlin, R. A. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David & M. W. Reder (Eds.), Nations and households in economic growth: Essays in honour of Moses Abramovitz (pp. 89–125). New York: Academic Press.Google Scholar
  11. Easterlin, R. A. (2001). Income and happiness: Towards a unified theory. Economic Journal, 111, 465–484.CrossRefGoogle Scholar
  12. Easterlin, R. A., & Angelescu, L. (2009). Happiness and growth the world over: time series evidence on the happiness-income paradox. IZA DP No. 4060. Germany: Institute for the Study of Labor (IZA).Google Scholar
  13. Easterlin, R. A., Angelescu, L., & Jacqueline, S. Z. (2011). The impact of modern economic growth on urban-rural differences in subjective well-being. Journal of World Development, 39(12), 2187–2198.CrossRefGoogle Scholar
  14. Haller, M., & Hadler, M. (2006). How social relations and structures can produce happiness and unhappiness: An international comparative analysis. Social Indicators Research, 75(2), 169–216.CrossRefGoogle Scholar
  15. Helliwell, F. J. (2003). How’s life? Combining individual and national variables to explain subjective well-being. Economic Modelling, 20, 331–360.CrossRefGoogle Scholar
  16. Helliwell, F. J. (2006). Well-being, social capital and public policy: What’s new? Economic Journal, 116, 34–35.CrossRefGoogle Scholar
  17. Heukamp, F. H., & Arino, M. A. (2011). Does country matter for subjective well-being? Social Indicators Research, 100(1), 155–170.CrossRefGoogle Scholar
  18. Hitokoto, H. (2014). Interdependent happiness: cultural happiness under the East Asian Cultural Mandate. JICA-RI Working Paper no.79. Japan: JICA Research Institute.Google Scholar
  19. Hofstede, G. (1980). Culture’s consequences. Beverly Hills, CA: Sage.Google Scholar
  20. House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (2004). Culture, leadership, and organizations, The globe study of 62 societies. Thousand Oaks: Sage.Google Scholar
  21. Inglehard, R. (2008). Changing values among Western publics from 1970 to 2006. West European Politics, 31, 130–146.CrossRefGoogle Scholar
  22. Inglehart, R., & Welzel, C. (2005). Modernization, cultural change, and democracy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  23. Jaafar, J. L., Idris, M. A., Ismuni, J., Fei, Y., Jaafar, S., Ahmad, Z., et al. (2012). The sources of happiness to the Malaysians and Indonesians: Data from a smaller nation. In Gaol, F. L. (Ed.), Procedia social and behavioral sciences volume 65. Proceedings of the international congress on interdisciplinary business and social science (pp. 1–7). NY, USA. Retrieved from Accessed 27 Feb 2018.
  24. Jacobs, M. (2014). Cultural impact on lean six sigma and corporate success: Casual analyses considering the effects of national culture and leadership. Dordrecht: Springer.Google Scholar
  25. Levin, J. (2014). Religion and happiness among Israeli Jews: Findings from the ISSP Religion III Survey. Journal of Happiness Studies, 15(3), 593–611.CrossRefGoogle Scholar
  26. Li, M. W. L., & Bond, H. M. (2010). Does individual secularism promote life satisfaction? The moderating role of societal development. Social Indicators Research, 99, 443–453.CrossRefGoogle Scholar
  27. Liao, P. S. (2014). More happy or less unhappy? Comparison of the balanced and unbalanced designs for the response scale of general happiness. Journal of Happiness Studies, 15(6), 1407–1423.CrossRefGoogle Scholar
  28. Liao, P. S., Tu, S. H., & Lung, S. C. C. (2016). The moderating effect of community interaction on individual well-being during hot days. In D. Wang & S. He (Eds.), Mobility, sociability and well-being of urban living (pp. 265–282). Dordrecht: Springer.CrossRefGoogle Scholar
  29. Long, J. S. (1997). Regression models for categorical and limited dependent variables. Thousand Oaks: Sage Publications.Google Scholar
  30. Lu, L., & Gilmour, R. (2004). Culture and conceptions of happiness: Individual oriented and social oriented SWB. Journal of Happiness Studies, 5(3), 269–291.CrossRefGoogle Scholar
  31. Lu, L., Gilmour, R., & Kao, S.-F. (2001). Cultural values and happiness: An East-West dialogue. Journal of Social Psychology, 141(4), 477–493.CrossRefGoogle Scholar
  32. Migheli, M. (2009). Religiosity and happiness: An ever-winning couple? An answer from India. Working Paper No. 142. Piedmont, Italy: University of Eastern.Google Scholar
  33. Ng, Y. K. (2002). The East-Asian happiness gap: Speculating on causes and implications. Pacific Economic Review, 7(1), 51–63.CrossRefGoogle Scholar
  34. Opfinger, M. (2014). ‘United in diversity’Does social diversity increase subjective well-being? Research Papers in Economics No. 10/14. Germany: Universität Trier.Google Scholar
  35. Oshio, T., Nozaki, K., & Kobayashi, M. (2010). Relative income and happiness in Asia: Evidence from nationwide surveys in China, Japan and Korea. Retrieved from Accessed 27 Feb 2018.
  36. Otsuka, Y., Hori, M., & Kawahito, J. (2013). Income is not associated with positive affect, life satisfaction, and subjective happiness among Japanese workers. In H. Knoop & A. Delle Fave (Eds.), Well-being and culture: Cross-cultural advancements in positive psychology (Vol. 3, pp. 171–182). Dordrecht: Springer.CrossRefGoogle Scholar
  37. Rokeach, M. (1968). Beliefs, attitudes and values. San Francisco: Jossey-Bass.Google Scholar
  38. Salahodjaev, R. (2014). Can religion buy happiness? The case of Singapore. MPRA Paper No. 56777. Retrieved from Accessed 27 Feb 2018.
  39. Schwatz, S. H. (1992). Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. In M. Zanna (Ed.), Advances in experimental social psychology (Vol. 25, pp. 1–65). Orlando: Academic Press.Google Scholar
  40. Stutzer, A., & Frey, B. S. (2012). Recent developments in the economics of happiness: A selective overview. Discussion Paper Series, IZA DP No 7078 Bonn: Institute for the Study of Labor (IZA).Google Scholar
  41. Suhail, K., & Chaudhry, H. R. (2004). Predictors of subjective well-being in an Eastern Muslim culture. Journal of Social and Clinical Psychology, 23(3), 359–376.CrossRefGoogle Scholar
  42. Takagi, D., Kondo, K., & Kawachi, I. (2013). Social participation and mental health: Moderating effects of gender, social role and rurality. BMC Public Health, 13, 701–709.CrossRefGoogle Scholar
  43. Tsou, M.-W., & Liu, J.-T. (2001). Happiness and domain satisfaction in Taiwan. Journal of Happiness Studies, 2, 269–288.CrossRefGoogle Scholar
  44. Uchida, Y., Norasakkunkit, V., & Kitayama, S. (2004). Cultural constructions of happiness: Theory and empirical evidence. Journal of Happiness Studies, 5(3), 223–239.CrossRefGoogle Scholar
  45. Uchida, Y., & Oishi, S. (2016). The happiness of individuals and the collective. Japanese Psychological Research, 58(1), 125–141.CrossRefGoogle Scholar
  46. Ura, K. D. (2009). An introduction to GNH (gross national happiness). Online paper of Schumacher College, UK. Retrieved from Accessed 27 Feb 2018.
  47. Valente, R. R., & Berry, B. J. L. (2016). Working hours and life satisfaction: A cross-cultural comparison of Latin America and the United States. Journal of Happiness Studies, 17(3), 1173–1204.CrossRefGoogle Scholar
  48. Veenhoven, R. (1998). Two state-trait discussions on happiness. A reply to Stones et al. Social Indicators Research, 43(3), 211–225.CrossRefGoogle Scholar
  49. Veenhoven, R. (2012). Cross-national differences in happiness: Cultural measurement bias or effect of culture? International Journal of Wellbeing, 2(4), 333–353.CrossRefGoogle Scholar
  50. Wang, S. (2014). Measuring and explaining subjective well-being in Korea. Research Monograph 2014-02. Sejong-si: Korea Development Institute.Google Scholar
  51. Wei, X., Huang, S., Stodolska, M., & Yu, Y. (2015). Leisure time, leisure activities and happiness in China. Journal of Leisure Research, 47(5), 556–576.CrossRefGoogle Scholar
  52. Welzel, C. (2006). Democratization as an emancipative process: The neglected role of mass motivations. European Journal of Political Research, 45(6), 871–896.CrossRefGoogle Scholar
  53. Welzel, C. (2013a). Freedom rising: Human empowerment and the quest for emancipation. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  54. Welzel, C. (2013b). Online Appendix for Freedom rising: Human empowerment and the quest for emancipation. Online document. Retrieved from Accessed 27 Feb 2018.
  55. Welzel, C., & Inglehard, R. (2010). Agency, values and well-being: A human development model. Social Indicators Research, 97, 43–63.CrossRefGoogle Scholar
  56. Welzel, C., Inglehard, R., & Kligemann, H. D. (2003). The theory of human development: A cross-cultural analysis. European Journal of Political Research, 42(3), 341–379.CrossRefGoogle Scholar
  57. Wucherpfennig, J., & Deutsch, F. (2009). Modernization and democracy: Theories and evidence revisited. Living Reviews in Democracy, 1, 1–9.Google Scholar
  58. Ye, D., Ng, Y. K., & Lian, Y. (2015). Culture and happiness. Social Indicators Research, 123(2), 519–547.CrossRefGoogle Scholar
  59. Zagorski, K. (2011). Income and happiness in time of post-communist modernization. Social Indicators Research, 104(2), 331–349.CrossRefGoogle Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  • Hock-Eam Lim
    • 1
    Email author
  • Daigee Shaw
    • 2
    • 6
  • Pei-Shan Liao
    • 3
  • Hongbo Duan
    • 4
    • 5
  1. 1.School of Economics, Finance and BankingUniversiti Utara MalaysiaSintokMalaysia
  2. 2.Institute of Economics, Academia SinicaNankang, TaipeiTaiwan
  3. 3.Research Center for Humanities and Social Sciences, Academia SinicaNankang, TaipeiTaiwan
  4. 4.School of ManagementHebei UniversityBaodingChina
  5. 5.School of BusinessRenmin UniversityBeijingChina
  6. 6.Institute of Natural Resource ManagementNational Taipei UniversityNew Taipei CityTaiwan

Personalised recommendations