Happiness and Monetary Factors

Previous literature studying happiness, or subjective well-being, has mainly analyzedhappiness in relation to income. However, such an approach is incomplete, as assets and debtprovide additional information related to an individual’s economic well-being. The purpose ofthis thesis is to analyze the inclusion of assets and debt in the model of one’s subjective wellbeing.In addition, interaction effects between income and assets, and income and debt, will beexamined. Through the use of ordered probit regressions, we find that assets and debt must beincluded in order to model one’s subjective well-being. Interaction effects provide interestinginsights, and these effects are discussed. However, in line with previous literature, we find thatnon-monetary factors are very important in explaining one’s level of happiness.