Title: Mediating role of financial satisfaction between income and subjective wellbeing: an evidence from Pakistan

Authors: Muhammad Hassan Danish; Hafeez Ur Rehman Khan

Addresses: National College of Business Administration and Economics, 157-M, Madre Millat Road, Near Hamdard Chowk, Township, Lahore 54770, Pakistan ' School of Business Economics, University of Management and Technology, C-II, Johar Town, Lahore 54700, Pakistan

Abstract: The present study aims at analysing the role of income on subjective well-being (SWB) through the mediation channel of financial satisfaction (FS) by deploying the generalised structural equation model (GSEM) with order logit after collecting the data from 1566 households in rural and urban Punjab, Pakistan. Results of this study illustrate that education, income and household assets related to FS are significantly positive, while these variables had no significant relationship with SWB. Moreover, findings of the study showed that income does not affect SWB of people unless they are financially satisfied with the overall position of their household. Health, social capital and freedom of choice are also significant predictors of SWB. The present study suggests the policy makers to lower the interest rate to encourage investment among lower- or middle-income group, which may lead to an increase in their assets and consequently, an increase in financial and subjective wellbeing.

Keywords: income; financial satisfaction; happiness; life satisfaction; life worthwhile; social capital; order logit; GSEM; generalised structural equation model; Punjab; Pakistan.

DOI: 10.1504/IJHD.2021.117097

International Journal of Happiness and Development, 2021 Vol.6 No.3, pp.220 - 236

Received: 24 Aug 2020
Accepted: 18 Sep 2020
Published online: 17 Aug 2021 *

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