The relationship between perceived economic standing and happiness

Gudrun Svavarsdottir*, Tinna Laufey Asgeirsdottir

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We examine the importance of perception in the relationship between income and happiness. Using Icelandic data, we show that people’s perception of their economic standing is more telling of their happiness than their actual income. We find a stronger association between happiness and a negative perception of one’s economic standing than happiness and a positive perception.

Original languageEnglish
JournalApplied Economics Letters
Publication statusPublished - 6 Jul 2022

Bibliographical note

Funding Information:
Provision of data from the Directorate of Health in Iceland is gratefully acknowledged, as well as funding from the Icelandic Student Innovation Fund (grant no. 195999-0091), The

Funding Information:
Icelandic Research Fund (grant no. 130611-051), and The University of Iceland Research

Publisher Copyright:
© 2022 Informa UK Limited, trading as Taylor & Francis Group.

Other keywords

  • happiness
  • income
  • Perceived economic standing
  • relative income


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