Asset poverty and happiness in urban China

Policymakers and researchers show increasing interest in the use of happiness as a measure of subjective well-being. Policymakers indicate that measures of happiness provide more balanced estimates of social development than do measures that focus on economic growth or gross domestic product (GDP). The 12th Five-­Year­Plan­of­the­Chinese­central­government­specifies­the­state’s­economic­ and developmental goals for 2011-2015 (Casey and Koleski 2011). One such goal­is­to­ensure­that­all­Chinese­citizens­share­the­benefits­of­economic­growth,­ and­the­plan­‘has­been­hailed­as­a­blueprint­for­a­“happy­China”­’,­as­noted­in­an­ Economist­ article­ on­ 17­March­ 2011.­ In­ their­ own­ five-­year­ plans,­ provincial­ governments­ also­ emphasize­ the­ idea­ of­ promoting­ happiness.­ For­ instance,­ Guangdong­province­declared­that­it­would­become­‘happy­Guangdong’­between­ 2011­and­2015,­and­Beijing­claimed­that­it­wants­its­citizens­to­lead­‘happy­and­ glorious­lives’,­according­to­the­same­Economist article. ­ Previous­studies­examine­important­social­factors­that­affect­happiness,­focusing on individual and household socio-economic characteristics as well as inequality. Despite the extensive research concerning the effects of household income­and­income­disparity­on­perceptions­of­happiness,­little­is­known­about­ the relationship between happiness and household assets (or wealth). Assets are the stock of wealth-type resources held by households at a certain point in time. They­ may­ include­ a­ home,­ a­ business,­ savings,­ stocks,­ bonds,­ and­ other­ resources of monetary value. Assets function not only as reserves to protect household­economic­security­and­future­consumption,­but­also­as­an­important­ instrument for facilitating long-term economic development and social mobility (Caner­and­Wolff­2004;­Nam,­Huang,­and­Sherraden­2008).­Beyond­consumption,­household­assets­affect­an­individual’s­opportunities­for­business­start-­up,­ education,­ and­ home­ ownership,­ as­well­ as­ one’s­ ability­ to­ achieve­ economic­ aspirations. Research shows that asset effects extend beyond the economic arena; the psychological well-being of individuals and households depends in part on assets­owned­(Caner­and­Wolff­2004;­Schneider­2004;­Sherraden­1991).­Therefore,­ household­ assets­ and­ income­ may­ have­ different­ effects­ on­ personal­ happiness. ­ This­study­fills­a­knowledge­gap­by­examining­the­association­between­household­ assets­ and­ personal­ happiness­ in­ urban­ China.­ In­ particular,­ this­ project­

focuses­on­ the­ concept­of­ asset­poverty­–­ the­ insufficiency­of­ assets­ to­ satisfy­ basic­household­needs­for­a­limited­period­of­time­(Haveman­and­Wolff­2004).­ The study hypothesizes that asset poverty and household income are key determinants­of­an­individual’s­subjective­well-­being­(happiness).­I­also­hypothesize­ that four factors mediate the relationship between asset poverty and happiness: precautionary­ savings,­ household­ living­ standard,­ perceived­ fairness­ of­ the­ income­distribution,­and­predicted­future­ income.­The­findings­ from­this­study­ have important implications for policy efforts that employ asset-building strategies to promote happiness in China.