Abstract
We use data from the 2016 China Labor-force Dynamics Survey (CLDS) to examine the relationship between happiness and consumption expenditure of rural farmers in China. A two-stage residual inclusion approach is applied to tackle the potential endogeneity issue of happiness. The empirical results show that a higher level of happiness is associated with an increase in consumption expenditure in general. Further analysis reveals that higher levels of happiness are positively and significantly associated with higher expenditures on basic living goods, education and gifts. We also find that both household income and access to the Internet boost happiness and increase consumption expenditure. Happiness plays a larger role in improving the consumption expenditure of rural households compared with their urban counterparts. Our findings may suggest that improving rural income via income diversification strategies and investing in rural information and communication technology infrastructures would encourage rural farmers’ happiness, promote the upgrading of rural consumption and boost sustainable economic growth.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data Availability
The data that support the findings of this study are available from the corresponding author, Wanglin Ma, upon reasonable request.
Notes
In addition to Pearson correlation analysis, we also run one ordered probit model for happiness equation and one OLS model for consumption expenditure equation with inclusion of the IV (i.e. community safety). The results (Table 7 in the Appendix) show that the IV is statistically significant in the happiness equation but not statistically significant in the consumption expenditure equation. The findings further confirm the validity of the IV.
Family functioning is a multidimensional concept that refers to how family members interact with each other and work together to achieve common family goals and outcomes (Morris and Blanton 1998).
References
Alesina, A., Di Tella, R., & MacCulloch, R. (2004). Inequality and happiness: are Europeans and Americans different? Journal of Public Economics, 88(9–10), 2009–2042. https://doi.org/10.1016/j.jpubeco.2003.07.006.
Asfaw, S., Shiferaw, B., Simtowe, F., & Lipper, L. (2012). Impact of modern agricultural technologies on smallholder welfare: evidence from Tanzania and Ethiopia. Food Policy, 37(3), 283–295. https://doi.org/10.1016/j.foodpol.2012.02.013.
Basu, A., Coe, N., & Chapman, C. G. (2017). Comparing 2SLS vs 2SRI for binary outcomes and binary exposures exposures. NBER Working Paper No. 23840, pp 1–34.
Blanchflower, D. G., & Oswald, A. J. (2004). Money, sex and happiness. The Scandinavian Journal of Economics, 106(3), 393–415. https://doi.org/10.1111/j.1467-9442.2004.00369.x.
Bubić, A., & Erceg, N. (2018). The role of decision making styles in explaining happiness. Journal of Happiness Studies, 19(1), 213–229. https://doi.org/10.1007/s10902-016-9816-z.
Carter, D. M. (2011). Recognizing the role of positive emotions in fostering environmentally responsible behaviors. Ecopsychology, 3(1), 65–69. https://doi.org/10.1089/eco.2010.0071.
Cuñado, J., & de Gracia, F. P. (2012). Does education affect happiness? Evidence for Spain. Social Indicators Research, 108(1), 185–196. https://doi.org/10.1007/s11205-011-9874-x.
Cuñado, J., & de Gracia, F. P. (2013). Environment and happiness: new evidence for Spain. Social Indicators Research, 112(3), 549–567. https://doi.org/10.1007/s11205-012-0038-4.
DeLeire, T., & Kalil, A. (2010). Does consumption buy happiness? Evidence from the United States. International Review of Economics, 57(2), 163–176. https://doi.org/10.1007/s12232-010-0093-6.
DiMaria, C. H., Peroni, C., & Sarracino, F. (2019). Happiness matters: productivity gains from subjective well-being. Journal of Happiness Studies, 0123456789, 139–160. https://doi.org/10.1007/s10902-019-00074-1.
Easterlin, R. (1974). Does economic growth improve the human lot? Some empirical evidence. In Nations and Households in Economic Growth (pp. 89–125). Elsevier. https://doi.org/10.1016/B978-0-12-205050-3.50008-7.
Fernández-Villaverde, J., & Krueger, D. (2011). Consumption and saving over the life cycle: how important are consumer durables? Macroeconomic Dynamics, 15(5), 725–770. https://doi.org/10.1017/S1365100510000180.
Fredrickson, B. L. (2004). The broaden-and-build theory of positive emotions. Philosophical Transactions of the Royal Society B: Biological Sciences, 359(1449), 1367–1377. https://doi.org/10.1098/rstb.2004.1512.
Frey, B. S., & Stutzer, A. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40(2), 402–435. https://doi.org/10.1257/jel.40.2.402.
Frey, B. S., & Stutzer, A. (2008). The thirst for happiness. Journal of International Business Ethics, 1(1), 7–17.
Frijters, P., & Beatton, T. (2012). The mystery of the U-shaped relationship between happiness and age. Journal of Economic Behavior and Organization, 82(2–3), 525–542. https://doi.org/10.1016/j.jebo.2012.03.008.
Garg, N., Wansink, B., & Inman, J. J. (2007). The influence of incidental affect on consumers’ food intake. Journal of Marketing, 71(1), 194–206. https://doi.org/10.1509/jmkg.71.1.194.
Graham, C., Eggers, A., & Sukhtankar, S. (2004). Does happiness pay? An exploration based on panel data from Russia. Journal of Economic Behavior and Organization, 55(3), 319–342. https://doi.org/10.1016/j.jebo.2003.09.002.
Grover, S., & Helliwell, J. F. (2019). How’s life at home? New evidence on marriage and the set point for happiness. Journal of Happiness Studies, 20(2), 373–390. https://doi.org/10.1007/s10902-017-9941-3.
Guven, C. (2011). Are happier people better citizens? Kyklos, 64(2), 178–192. https://doi.org/10.1111/j.1467-6435.2011.00501.x.
Guven, C. (2012). Reversing the question: does happiness affect consumption and savings behavior? Journal of Economic Psychology, 33(4), 701–717. https://doi.org/10.1016/j.joep.2012.01.002.
Helliwell, J. F., Layard, R., & Sachs, J. D. (2019). World happiness report 2019. Sustainable Development Solutions Network. New York. https://doi.org/10.1787/how_life-2017-en.
Isen, A. M. (2000). On positive affect and self-regulation. Inquiry, Psychological, 11(3), 184–187.
Jebb, A. T., Tay, L., Diener, E., & Oishi, S. (2018). Happiness, income satiation and turning points around the world. Nature Human Behaviour, 2, 33–38. https://doi.org/10.1038/s41562-017-0277-0.
Kenny, C. (1999). Does growth cause happiness, or does happiness cause growth? Kyklos, 52(1), 3–25. https://doi.org/10.1111/j.1467-6435.1999.tb00576.x.
Khonje, M., Manda, J., Alene, A. D., & Kassie, M. (2015). Analysis of adoption and impacts of improved maize varieties in eastern Zambia. World Development, 66, 695–706.
Kim, D. (2018). Cross-national pattern of happiness: do higher education and less urbanization degrade happiness? Applied Research in Quality of Life, 13(1), 21–35. https://doi.org/10.1007/s11482-017-9504-0.
Knight, J., & Gunatilaka, R. (2010). Great expectations? The subjective well-being of rural-urban migrants in China. World Development, 38(1), 113–124. https://doi.org/10.1016/j.worlddev.2009.03.002.
Krause, A. (2013). Don’t worry, be happy? Happiness and reemployment. Journal of Economic Behavior and Organization, 96, 1–20. https://doi.org/10.1016/j.jebo.2013.09.002.
Lardy, N. R. (2011). Sustaining China’s economic growth after the global financial crisis. Choice Reviews Online. Washington, DC: Peterson Institute for International Economics.
Le Port, A., Gueguen, A., Kesse-Guyot, E., Melchior, M., Lemogne, C., Nabi, H., et al. (2012). Association between dietary patterns and depressive symptoms over time: a 10-year follow-up study of the GAZEL cohort. PLoS One, 7(12), e51593. https://doi.org/10.1371/journal.pone.0051593.
Lu, L. U. O. (2001). Understanding happiness: a look into the Chinese folk psychology. Journal of Happiness Studies, 2(September), 407–432. https://doi.org/10.1023/A:1013944228205.
Ma, W., & Zhu, Z. (2020). Reducing cropland abandonment in China: do agricultural cooperatives play a role? Journal of Agricultural Economics. https://doi.org/10.1111/1477-9552.12375.
Ma, W., Grafton, R. Q., & Renwick, A. (2018). Smartphone use and income growth in rural China: empirical results and policy implications. Electronic Commerce Research, In press. https://doi.org/10.1007/s10660-018-9323-x.
Ma, W., Zhou, X., & Renwick, A. (2019). Impact of off-farm income on household energy expenditures in China: implications for rural energy transition. Energy Policy, 127(December 2018), 248–258. https://doi.org/10.1016/j.enpol.2018.12.016.
Miles, D. (1997). A household level study of the determinants of incomes and consumption linked references are available on JSTOR for this article. The Economic Journal, 107(440), 1–25.
Morris, M. L., & Blanton, P. (1998). Predictors of family functioning among clergy and spouses: influences of social context and perceptions of work-related stressors. Journal of Child and Family Studies, 7, 27–41. https://doi.org/10.1023/A:1022955912433.
Mujcic, R., & Oswald, A. J. (2016). Evolution of well-being and happiness after increases in consumption of fruit and vegetables. American Journal of Public Health, 106(8), 1504–1510. https://doi.org/10.2105/AJPH.2016.303260.
NBSC. (2019). National Bureau of Statistics of China. National Data.
Ngamaba, K. H., & Soni, D. (2018). Are happiness and life satisfaction different across religious groups? Exploring determinants of happiness and life satisfaction. Journal of Religion and Health, 57(6), 2118–2139. https://doi.org/10.1007/s10943-017-0481-2.
Nie, P., Sousa-Poza, A., & Nimrod, G. (2017). Internet use and subjective well-being in China. Social Indicators Research, 132(1), 489–516. https://doi.org/10.1007/s11205-015-1227-8.
Oshio, T., Nozaki, K., & Kobayashi, M. (2011). Relative income and happiness in Asia: evidence from nationwide surveys in China, Japan, and Korea. Social Indicators Research, 104(3), 351–367. https://doi.org/10.1007/s11205-010-9754-9.
Oswald, A. J., & Blanchflower, D. (2004). Money, sex, and happiness: an empirical study. Scandinavian Journal of Economics, 106(3), 393–416. https://doi.org/10.1111/j.1467-9442.2004.00369.x.
Oswald, A. J., Proto, E., & Sgroi, D. (2015). Happiness and productivity. Journal of Labor Economics, 33(4), 789–822. https://doi.org/10.1086/681096.
Paterson, M. (2010). Consumption and everyday life (2nd editio.). Brixham: Sunrise Setting Ltd.. https://doi.org/10.4324/9780203358733_chapter_4.
Sanch-Maritan, M., & Vedrine, L. (2019). Forced displacement and technology adoption: an empirical analysis based on agricultural households in Bosnia and Herzegovina. The Journal of Development Studies, 55(6), 1325–1343. https://doi.org/10.1080/00220388.2018.1475645.
Shields, M. A., & Price, S. W. (2005). Exploring the economic and social determinants of psychological well-being and perceived social support in England. Journal of the Royal Statistical Society. Series A: Statistics in Society, 168(3), 513–537. https://doi.org/10.1111/j.1467-985X.2005.00361.x.
Steptoe, A. (2019). Happiness and health. Annual Review of Public Health, 40(1), 339–359. https://doi.org/10.1146/annurev-publhealth-040218-044150.
Stutzer, A., & Frey, B. S. (2006). Does marriage make people happy, or do happy people get married? Journal of Socio-Economics, 35(2), 326–347. https://doi.org/10.1016/j.socec.2005.11.043.
Sujarwoto, S. (2019). Does happiness pays? A Longitudinal Family Life Survey. Applied Research in Quality of Life. https://doi.org/10.1007/s11482-019-09798-x.
Terza, J. V. (2018). Two-stage residual inclusion estimation in health services research and health economics. Health Services Research, 53(3), 1890–1899. https://doi.org/10.1111/1475-6773.12714.
Veenhoven, R. (2008). Healthy happiness: effects of happiness on physical health and the consequences for preventive health care. Journal of Happiness Studies, 9(3), 449–469. https://doi.org/10.1007/s10902-006-9042-1.
Walsh, L. C., Boehm, J. K., & Lyubomirsky, S. (2018). Does happiness promote career success? Revisiting the evidence. Journal of Career Assessment, 26(2), 199–219. https://doi.org/10.1177/1069072717751441.
Wang, P., Pan, J., & Luo, Z. (2015). The impact of income inequality on individual happiness: evidence from China. Social Indicators Research, 121(2), 413–435. https://doi.org/10.1007/s11205-014-0651-5.
Wang, H., Cheng, Z., & Smyth, R. (2019). Consumption and happiness. The Journal of Development Studies, 55(1), 120–136. https://doi.org/10.1080/00220388.2017.1371294.
Warde, A., & Tampubolon, G. (2002). Social capital, networks and leisure consumption. Sociological Review, 50(2), 155–180+312. https://doi.org/10.1111/1467-954X.00361.
Welsch, H. (2006). Environment and happiness: valuation of air pollution using life satisfaction data. Ecological Economics, 58(4), 801–813. https://doi.org/10.1016/j.ecolecon.2005.09.006.
Winkelmann, L., & Winkelmann, R. (1995). Happiness and unemployment: a panel data analysis for Germany. Applied Economics Quarterly, 41(4), 293–307. https://doi.org/10.5167/uzh-1189.
Yang, Y., Li, P., & Kou, Y. (2017). Orientations to happiness and subjective well-being in Chinese adolescents. Child Indicators Research, 10(4), 881–897. https://doi.org/10.1007/s12187-016-9410-2.
Zelenski, J. M., Murphy, S. A., & Jenkins, D. A. (2008). The happy-productive worker thesis revisited. Journal of Happiness Studies, 9(4), 521–537. https://doi.org/10.1007/s10902-008-9087-4.
Zhang, X., Zhang, X., & Chen, X. (2017). Happiness in the air: how does a dirty sky affect mental health and subjective well-being? Journal of Environmental Economics and Management, 85, 81–94. https://doi.org/10.1016/j.jeem.2017.04.001.
Funding
The authors would like to thank the funding support from the National Natural Science Foundation of China Project (Grant No. 71903062) and Lincoln University commerce faculty seed fund project (INT5066).
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of Interest
The authors declare that there are no conflict of interest.
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Appendix
Rights and permissions
About this article
Cite this article
Zhu, Z., Ma, W., Leng, C. et al. The Relationship Between Happiness and Consumption Expenditure: Evidence from Rural China. Applied Research Quality Life 16, 1587–1611 (2021). https://doi.org/10.1007/s11482-020-09836-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11482-020-09836-z
Keywords
- Happiness
- Consumption expenditure
- Expenditure patterns
- Two-stage residual inclusion approach
- Rural China