Stability and variability in the relationship between subjective well-being and income

Summary

Empirical studies typically find a moderate positive correlation between subjective well-being (SWB) and income. In the present paper, we examined stable and transient determinants of the relation between affective well-being and income in the British Household Panel Survey (BHPS; N = 37,041) and the relation between cognitive well-being and income in the BHPS (N = 31,871) and the Socio-Economic Panel (SOEP; N = 43,565) with bivariate latent state–trait models. The results show that the relation between SWB and income is primarily driven by stable individual differences whereas transient changes in income are weakly related to transient changes in SWB. It is therefore important to consider stable dispositional and stable situational variables in studies on income and SWB.