Household income and satisfaction with life: cognitive emotional impact paradox

Abstract

Much of the discussion over satisfaction with life has focused on the significance of income. Some researchers argue that cognitive factors (expectations, social comparisons, life evaluations, schemas) is the mediating part between income and subj ective wellbeing, however, positive psychology suggests that happiness determines the effect of social comparison itself. Th is paradox could be titled “cognitive - emotional impact paradox”. We have chosen to explore this paradox and investigate the relationship between household income, cognitions, emotions, and satisfaction with life in Lithuania, as various studies, includin g “World Value Survey”, indicate Lithuania is among the countries demonstrating very low scores on happiness of population even though its’ economy grew fast when this country regained its’ independence in 1991. This paper presents some results of the surv ey which was conducted in 2016 (representative sample, n=1001). The analysis of data has demonstrated that when people get low household income per month, they report more intense negative emotions and less positive emotions. Secondly, our results suggest that people getting low household income per month express more negative cognitions and less positive cognition. Thirdly, the results demonstrated strong relationship between cognitio ns, emotions, and satisfaction with life. Moreover, the results contribu te to the empirical literature on “income – happiness” relation by demonstrating that household income has no significant direct effect on satisfaction with life, but there is a significant effect of househ old income on basic cognitions, which have a signi ficant effect on emotions. Subsequently, basic cognitions and emotions have an effect on satisfaction with life. However, “cognitive – emotional impact paradox” needs further exploration.