Happiness; It is all relative? : - A study of well-being and the effect of relative and absolute income.

Using ordered probit techniques this thesis examines how subjective well-being among different agents in Sweden are effected by absolute and relative income. In other words this thesis examines the importance of absolute and relative income among different types of agents where agents are identified depending on: Age, Population-density, Highest level of education, Different levels of income, Country of birth, Unemployment and Partnership. The result suggests that relative income is on average more important to SWB among agents that are; ‘middle-aged’ (30-65 years of age), female, born in Sweden, has a lower education level, lives in an area with high population density are employed and lives with a partner. Absolute income was found to be on average more important to SWB among agents that are; ‘middle-aged’ (30-65 years of age), not born in Sweden, single, male, unemployed, has a lower education level and lives in an area with high population density