Income and Income Aspiration: Exploring the Impact on Life and Financial Satisfaction

Abstract

This study examines the impact of income aspiration on subjective well-being, focusing on life satisfaction and financial satisfaction. It uniquely explores social media usage as a source of income aspiration, an aspect not previously studied. The study utilizes the most recent data from the 7th wave of the World Values Survey (WVS), which includes responses from over 92,000 participants across 66 countries. The estimates of the Ordinary Least Square (OLS) model indicate that income positively influences both life and financial satisfaction, with slightly greater benefits for men compared to women. However, income aspiration, amplified by social media usage, negatively impacts satisfaction by fostering unrealistic expectations and upward comparisons. This effect is more pronounced in men, suggesting they are more influenced by social media-driven comparisons, which diminish the psychological benefits of higher income. Social media moderates the relationship between income and satisfaction, reducing the perceived gains from income and increasing dissatisfaction, particularly among those prone to aspirational or comparative behaviors. This research provides guidance for developing interventions to reduce income inequality and promote realistic income expectations while offering insights to help individuals and counselors set achievable income goals, mitigating the negative effects of unattainable aspirations.