Beyond income: poverty and subjective wellbeing in four rural communities in México

Abstract

Even though money allows individuals to acquire numerous goods and potentially gain access to a better quality of life, the empirical evidence from subjective analyses of wellbeing shows that that, as popular wisdom warns, money does not buy happiness. This study stems from the hypothesis that measurements based exclusively on income are not the best approximation to measure the wellbeing that people experience. To evaluate this hypothesis, information from households interviewed in four rural communities located in the states of Jalisco and Michoacán are used. The research is centered on evaluating the wellbeing of individuals in conditions of poverty. For this purpose, two approaches were compared: income poverty and subjective wellbeing. Results show that the classification of income poverty is quite different than the one obtained using indicators of subjective wellbeing. The results show that if income were to be used as the sole guide for public policy, then important information about the wellbeing that individuals experience would be omitted. Within this context, the approach of subjective wellbeing is a good complement to the traditional measurements of wellbeing.