Islam, Gazi

English

Research Papers in Economics

Objective and subjective 
indicators of happiness in 
Brazil: The mediating role of 
social
Gazi Islamro
Insper Working Paper
WPE: 146/2008Copyright Insper. Todos os direitos reservados.
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running head:  INDICATORS OF HAPPINESS IN BRAZIL 
 
 
 
Objective and subjective indicators of happiness in Brazil: The mediating role of social 
class 
 
Gazi Islam 
Department of Administration 
Ibmec, São Paulo 
Rua Quatá 300, 4 andar 
Vila Olímpia, São Paulo SP 
Brazil, 04546-042 
gislamster@gmail.com 
tel. 55-11-4504-2438 
Eduardo H. Wills 
Universidad de los Andes, Bogotá 
 
Marilyn Hamilton,  
Royal Roads University 
 
 
 
 
 
 
 
 
 
                                                                                                  Indicators of Happiness  2
Objective and subjective indicators of happiness in Brazil: The mediating role of social 
class 
Abstract 
  The following research note tests the proposition that monetary household 
income affects Subjective Well Being (Deiner et al, 1999) through the mediating 
mechanisms of objective and subjective social class.  A representative sample is drawn 
from a Brazilian urban center, in a door-to-door survey format.  A back-translated 
version of Diener et al’s (1985) Satisfaction with Life Scale showed a significant 
relationship with income.  However, this effect was mediated by both objectively 
measured and subjectively measured social class. These effects reinforce, extend, and 
internationally generalize the person x situation perspective elaborated by Diener et al.  
 
Key Words: Happiness, Social Class, Subjective Well Being, Income, Latin America, 
Brazil 
 
 
 
 
 
 
 
 
 
                                                                                                  Indicators of Happiness  3
The last 30 years have seen a proliferation in studies of the correlates of 
subjective happiness (e.g. Diener et al, 1999).  The recognition that economic well-
being is distinct from subjective well-being has become an important development in 
the social science literature; however, the frequent correlation between the two (Diener 
et al, 1999) has led researchers to attempt to disentangle the complicated link between 
material prosperity and happiness.  
The idea that financial buying power is linked to happiness through various 
intermediary mechanisms has gained currency in recent years, particularly in the 
psychological literature (e.g. Johnson & Krueger, 2006; Solberg, Diener, Wirtz, Lucas, 
& Oiahi, 2002).  Johnson & Krueger, for example, demonstrate a mediating role of 
control over life circumstances in the relationship between wealth and subjective well-
being, suggesting a gene-environment interaction between personality and wealth.  
Campbell, Converse and Rogers (1976) and later Solberg et al (2002) suggest that this 
mediating link involves self-discrepancy comparisons between lifestyle-related desires 
and economic reality.  With regards to other comparisons, however, the evidence has 
been mixed (Solberg et al 2002); Diener & Fujita (1997), for example, found that 
happiness can itself determine social comparison points, which would reduce the 
situational importance of material prosperity in affecting happiness.  
Because of this plasticity of reference points for self-comparison, it makes 
conceptual sense to compare both objectively measured social comparisons and 
subjective social comparisons when studying mediators of income and subjective well 
being.  Using social class – an inherently comparative notion- can be informative in this 
respect.  The notion of social class, particularly as it has been studied in Brazil (e.g. 
Berti & Barros, 1986; Lombardi, Bronfman, Facchini, Victora, Barros, Béria &Teixeira
, 
1988) is based on an economic, but also an ideological and legal-political stratification                                                                                                  Indicators of Happiness  4
within a society. It refers to the placement of individuals within a social and ideological 
hierarchy, and is operationalized as the ability to carry out a material existence 
consistent with specific consumption habits. Thus, as measured in the current Brazilian 
sample, objective social class is a lifestyle variable (e.g. Schaningler, 1981), which 
should be subject to constraints based on income, but should also reflect subjective 
desires for the acquisition of goods. Second, since in Brazil the notion of social class is 
often used in the colloquial as a shorthand for one’s “position” in society, the subjective 
measurement of social class should capture peoples’ view of how they fare compared to 
society in general, without imposing experimenter-specified group membership or 
reference points as in some past literature (e.g. Diener, Sandvik, Siedlitz & Diener, 
1993).  Thus, we hypothesize that both objective and subjectively measured social class 
should provide a mechanism linking income to subjective-well being. 
We here propose and test the idea that social class provides an important 
mediating link between these two concepts. As stated above, we conceptualize two 
different forms of social class: objective social class (OSC), or social segmentation 
based on materially observable consumption habits and subjective social class (SSC), or 
the “feeling” of being in a high, middle or low class. Past literature comparing 
psychological effects of income versus social class have emphasized that the latter is 
more reflective of lifestyle differences versus simple buying power (e.g. Schaningler, 
1981). Because social class depends on some degree of material wealth yet is proximal 
to the subjective daily experiences people encounter than raw income, we posited that 
social class, both objective and subjective, will statistically mediate the relationship 
between income and subjective well being (SWB). 
Our sample was a representative sample of citizens of Belo Horizonte Brazil 
(N=576), who took part in a survey conducted by national polling agency working with                                                                                                  Indicators of Happiness  5
the authors.  Income was measured in terms of monthly household income in Brazilian 
Reais.  Objective social class was measured using official census measures (based on a 
representative array of consumer goods indices used by the federal government 
statistical association [IBGE]), and subjective class was measured by a questionnaire 
item asking respondents to classify themselves between class A-E (a common colloquial 
way to speak about class in Brazil). Low scores indicated higher social class (i.e. 1
st 
class, 2
nd class, etc). The objective and subjective measures were conceptualized as 
indicating separate constructs; not unexpectedly, however, they were significantly 
correlated (r= .455, p<.01). This correlation was, however, low enough to sustain an 
argument for their distinctiveness, in addition to the theoretical distinction between 
material consumption and subjective evaluation of class.  SWB was measured by Diener 
et al’s (1985) Satisfaction with Life Scale, translated and back-translated, α= 0.788. 
In order to test for mediation, a four-step regression based method was used 
(Baron & Kenny, 1986).  In the first step, SWB was regressed on income, showing a 
significant linear relation (β = .186, t = 2.719, p <.01).  In the second step, social class 
measures were regressed on income, showing a strong relation for both objective and 
subjective social class (OSC: β = -1.198, t = -25.498, p <.01; SSC:  β = -. 594, t = -
13.198, p <.01).  In the third step, both objective and subjective social class were 
significantly related to SWB (OSC: β = -.117, t = -2.825, p <.01; SSC: β = -.304, t = -
.5601, p <.01). Finally, to show mediation, SWB was regressed on income, as in the 
first step, but controlling for social class.  In this case, mediation is shown if the effect 
found in the first step drops below significance (Baron & Kenny, 1986).  Controlling for 
OSC, the income-SWB relationship was non-significant (β = -. 097, t = .964, p = .335).  
In the case of SSC, the relationship was also non-significant (β = .002, t = .027, p 
=.978). In addition, in order to check for the independence of effects of OSC and SSC,                                                                                                  Indicators of Happiness  6
the effects of each on SWB were assessed controlling for the other.  In the case of SSC, 
the effects held regardless of OSC (β = -.296, t = -.484, p <.000).  However, controlling 
for SSC, the effects of OSC dropped to non-significance (β = -.013, t = -.278, p=.781), 
suggesting a particularly strong role for the subjective appraisal of class than for the 
objective measure.   
These results suggest that income is an important consideration in the prediction 
of happiness, but that income may work through proximal lifestyle mechanisms such as 
how individuals perceive themselves to be placed within society, and how their 
objective consumption patterns reflect high status lifestyles.  These results reinforce the 
person x environment perspective described by Diener et al (1999), showing empirically 
in an international sample how such a model may function.  Consistent with the 
discrepancy comparison framework (e.g. Campbell et al 1976), income worked mainly 
through lifestyle factors that proximately affected subjective well being.  Similar but 
distinct comparative lifestyle constructs such as socioeconomic status (e.g. Argyle 
1994), social status (e.g. Jost & Burgess 2000) and social power (e.g. Kelter, Anderson 
& Gruenfeld, 2003) could thus provide related areas for future exploration. 
This study compliments earlier self-discrepancy studies by linking macro, 
society level relative comparisons with subjective well-being.  Rather than past studies 
that identify particular references points or communities for comparison (e.g. Diener et 
al, 1993; Haggerty, 2000), we use a general index of placement within society as a 
whole.  Particularly in countries with extreme levels of inequality by world standards 
(i.e. Brazil, WorldBank, 2003), this difference may be conceptually important. 
Specifically, where a very small percentage of the population controls a large portion of 
the wealth, such as is the case in Latin America (Hoffman & Centeno, 2003), large 
portions of the population may fall within the lower social classes, but be surrounded by                                                                                                  Indicators of Happiness  7
similarly low-income neighbors.  That relative class standing can become salient even 
where the upper classes are so few and isolated attests to the power of class standing for 
psychological processes. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                  Indicators of Happiness  8
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Operacionalização do conceito de classe social em estudos epidemiológicos.

Social Class Versus Income Revisited: An Empirical Investigation,

Social comparisons and subjective wellbeing.

Subjective well being: Three Decades of Progress.

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The relationship between income and subjective well-being: Relative or absolute?

The Satisfaction With Life Scale.

Wanting, Having, and Satisfaction: Examining the Role of Desire Discrepancies in Satisfaction with Income.

Objective and subjective indicators of happiness in Brazil: The mediating role of social

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Objective and subjective indicators of happiness in Brazil: The mediating role of social

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