The Money Buffer Effect in China: A Higher Income Cannot Make You Much Happier but might Allow You to Worry Less

Abstract

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This study examined the possibility that there is a curvilinear relationship between income and subjective well-being in China. This study also investigated whether this curvilinear relationship is moderated by social class and mediated by respondents’ material affluence. The study was conducted in China, and the sample consisted of 900 blue-collar workers and 546 white-collar workers. The results for emotional well-being showed that income significantly predicted negative affect but not positive affect. This finding indicates that in China, high incomes may not make people happier but might allow them to worry less, which we call the money buffer effect. The results also showed that material affluence mediates the interaction effect between income and social class on subjective well-being. The implications of these results for future research and practice are discussed.

Keywords

• Income
• Social Class
• Subjective well-being
• Material affluence
• money buffer effects