18th International Conference on Innovative Computing, Information and Control (ICICIC2024)
Onsite (Qinhuangdao, China) and Online, September 10-13, 2024

PS-21: ICICIC2024-WS05-21
The Impact of Family Financial Situation on Life Satisfaction
Yu Zhang, Wenhui Zhao, Xiaobo Xu* and Hong Diao
School of Economics and Management (School of Tourism), Dalian University, Dalian 116622, P. R. China*Corresponding author: xuxiaobo@dlu.edu.cn

Introduction

Mathematical FormulasWith the increasing attention on the life quality and thedevelopment of economics on subjective well-being, theresearch on individuals’ life satisfaction has gradually extended
from the field of psychology to economics. This paper aims tostudy the important relationship between life satisfaction andfamily financial status. The concept of life satisfaction is first
defined, and three basic elements of household net income, net
assets and expenditure are applied to measure family financialsituation. Then, this research explores the impact of these threefinancial indicators on individual life satisfaction respectively. We
select data from China Family Panel Studies (CFPS) 2020
national survey, which is derived from two parts, the individual
self-answer questionnaire and the household economicquestionnaire. Descriptive statistical analysis and correlation
analysis are carried out, following by multiple covariance test.
Ordinary least square (OLS) with robust standard error isapplied to test the influence of household income, assets, andexpenditure on individual life satisfaction. Robustness checks ofreplacing econometric models are also implemented. Finally, thispaper analyzes various impacts from different individual
characters based on gender and age groups.
This paper draws the following conclusions. 1) The increaseof household net income, net assets and expenditure promoteindividual life satisfaction significantly. 2) There is no significant
difference among males and females. 3) There are age
differences in the influences, showing the younger age groupenjoys a significantly positive influence from these three financialaspects.

Life satisfactioni = α0 + α1incomei + α2CVi + εi (1)Life satisfactioni = α0 + α1asseti + α2CVi + εi(2)Life satisfactioni = α0 + α1expenditurei + α2CVi + εi (3)Note: CV represents controlled variables, including
age, gender, education, marital status, employment,popularity, happiness and health.

Methodologies
Ordinary least square (OLS) with robust standard error is applied
to study the impact of household income, assets, and expenditure on
individual life satisfaction as the baseline model. Probit regression isimplemented as robustness checks. Influences from different individual
characters based on gender and age groups are also analyzed using
the same method as the baseline model.

Research Questions
1)
2)
3)

Does household income have a significantly
positive influence on life satisfaction?
Does household asset pose a significantly
positive effect on life satisfaction?
Does household expenditure show aimpactonlifesignificantly
positivesatisfaction?

Variables
Dependent Variable:
Satisfaction with current life with 1 being very
dissatisfied and 5 being very satisfied
Independent Variables:
Family overall net income
Family overall net assets
Family overall expenditure

Conclusion
This paper tests the relationship between life satisfaction and family financial situation. The results show that household net
income, assets and expenditure pose significantly positive effects on individual life satisfaction even if the influences are different
among younger and older age groups. The findings are not only of great significance in statistics but also provide meaningful
suggestions for government to make policy adjustments among different age groups. This research indicates the improvement ofhousehold income significantly promotes individual life satisfaction, which shows material living standards, to a certain extent, are
key to ensure life quality and stability. Reliable income sources are important to improve individual life satisfaction especially for
those individuals 55 years or younger. However, for those individuals older than 55 years, lighter weight is required on financial
situation as the results are not statistically significant illustrating the causes of older individuals’ subjective life satisfaction are notlimited to financial satisfaction and more aspects should be explored.

18th International Conference on Innovative Computing, Information and Control (ICICIC2024)
Onsite (Qinhuangdao, China) and Online, September 10-13, 2024

TablesBaseline results of family financial situation on life satisfaction

Income

(1)

(2)

(3)

(4)

(5)

(6)

Life
Satisfaction
***
0.006
(7.129)

Life
Satisfaction
***
0.005
(6.954)

LifeSatisfaction

LifeSatisfaction

Life
Satisfaction

Life
Satisfaction

Asset

0.005

***

0.004

(8.609)***(8.432)

Expenditure

0.008

***

(3.807)
Age

0.009

***

0.009

(6.930)-0.031*-0.032-0.038(-1.942)(-1.867)***-0.037(-6.191)

***

***

0.072

(3.936)(4.016)

**

**

0.030

0.026

(2.354)(2.109)****Popularity

0.015

Happiness

0.233

0.015

(2.391)

0.234(38.165)-0.086(-9.746)
_cons
N
2R

3.816

1.928

0.070

0.026

3.847

1.966

**(2.088)
0.016**(2.419)
0.234

***

(38.358)***-0.087(-9.813)******(3.847)***-0.087***(-5.727)(38.197)******-0.034(2.373)****(-1.917)***(-6.338)
0.071

***

***

(6.575)

Education

Health

(4.714)0.009*-0.033

Employment***(6.969)GenderMarriage***

0.009***(-9.802)

***

3.843

***

1.924

***

(255.636)(23.824)(335.227)(24.087)(248.007)(23.768)8455.000

8455.000

8455.000

8455.000

8455.000

8455.000

0.004

0.324

0.005

0.324

0.001

0.323

*t statistics in parentheses p < 0.1,**

p < 0.05,***

p < 0.01