Document Type : Research Paper
Authors
1 Department of Energy Economics , Faculty of Economics , Allameh Tabatabai University
2 Economics department Allameh Tabataba"i university, Tehran, Iran
3 Department of Theoretical Economics,Faculty of Economics , Allameh Tabatabai University
4 www.atu.ac.ir
Abstract
The effect of income on subjective-wellbeing (as one of the criteria for measuring mental well-being) has been considered in many studies but various dimensions of this effect have not yet been studied. The study aims to investigate the nonlinear effect of income on the subjective-wellbeing of 58 selected countries during 2005 to 2020, which has been studied in two scenarios. For this purpose, a PSTR model developed from regime change models has been used. In the present study, the effects of income, unemployment, inflation, life expectancy, and income inequality on subjective-wellbeing have also been investigated. According to the obtained results, in a nonlinear relationship, the effect of GDP on subjective well-being at a certain threshold value of income inequality is decreasing. Therefore, if increasing national income and reducing income inequality as a factor affecting welfare is considered by politicians, it is also important to note that reducing inequality from a certain threshold onwards reduces the impact of income on welfare. This means that from a certain threshold on income inequality, the focus of governments on reducing income inequality should be reduced so that resources are spent on essentials.
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