This study is designed to examine the relationship between economic and psychological well-being at the household level. Our primary concern is with the paradox which has emerged in quality of life research: that some individuals or families with high (low) incomes report low (high) levels of psychological well- being. We focus on accounting for the discrepancy, in part, by constructing more rigorous measures of economic well-being than merely """"""""current income,"""""""" and using these measures as better predictors of psychological well-being over the life cycle. The Wisconsin Basic Needs Study will be used to construct measures of economic and psychological well being. The economic measures will be developed based on concepts arising from three economic hypotheses: (1) The Life Cycle Income Hypothesis; (2) The Relative Income Hypothesis; (3) The Resource Deficit Hypothesis. Use of these hypotheses contribute an added degree of rigor to measures of economic well-being which, it is believed, will result in a partial explanation of the observed discrepancy. The psychological well-being measure is based on the Terrible/Delight scale of Andrews and Withey (1976). Due to the empirical evidence supporting the importance of life cycle transitions on psychological well-being, this construct will be operationalized and provide a framework within which the relationships of interest will be explored. Multivariate regression models will be developed to estimate the relationship between psychological well-being and each of the three independent variables while controlling for other exogenous variables, particularly life cycle stage, gender of householder, and other demographic variables (e.g. occupation, duties, education, etc.).
