Does Trust Moderate the Effect of Relative Income on Happiness?

MEXT-Supported Program for the Strategic Research Foundation at Private Universities (2014-2018)Forming a Social Well-being Research Consortium in AsiaThis study examined the moderating effect of generalized trust on the association between relative income and happiness based on microlevel data collected through a Japanese nationwide web survey. As a method for income comparison, we adopted subjective relative income, defined as the difference between one\u27s income and the estimated average income of one\u27s classmates. To examine the influence of income on happiness, we created subjective richer and subjective poorer variables that represented the asymmetric nature of richness and poorness. We estimated interaction effects between generalized trust and subjective relative income, or richer/poorer, with ordinary least squares regressions. First, generalized trust moderated the effect of subjective relative income on happiness. Thus, trust is expected to reduce gaps in happiness between individuals who perceive themselves to be richer or poorer than others. Second, the moderating effect of trust was significant for subjective relative income, but not absolute income. Third, the moderating effect of trust was not symmetric between the richer/poorer comparison. For the female subsample, trust moderated the negative effect of subjective poorer, but not the positive effect of subjective richer. For the male subsample, trust moderated the positive effect of subjective richer, but promoted the negative effect of subjective poorer