The relationship between income and subjective well-being: the case of Spain

Abstract

This paper examines the evolution of individual subjective well-being (SWB) in Spain from 2013 to 2022, with special focus on its relationship with income. Of the many driving forces of SWB that have been identified in the literature, income is one of the most controversial. We use a large sample of individuals to analyze how income and SWB interacted during the post-2008 crisis period. As expected, our findings show that income is positively related to SWB, but it is so at a decreasing rate. The time interaction with income reveals that the effect of income has diminished over time. We conclude that, as material conditions improved in Spain during the period under analysis, the relevance of income in determining SWB did not.