Exploring the Impact of Wealth Accumulation on Subjective Well-Being in Kyrgyz Households

Abstract

This thesis explores the relationship between wealth accumulation and subjective well- being (SWB) in Kyrgyz households, focusing on how this relationship develops in the country’s unique socio-economic context. While global studies consistently indicate a link between wealth and well-being, little is known about how this dynamic appear in Kyrgyzstan, a nation characterized by economic transition and social complexity. Addressing this gap, the study employs panel data from the “Life in Kyrgyzstan” (LIK) Survey for 2016 and 2019, using Random Effects Ordered Logistic Regression to analyze the impact of wealth on SWB. The findings reveal a significant positive relationship between wealth accumulation and SWB, highlighting that increased wealth enhances well-being. However, the results also emphasize a non-linear dynamic: the marginal benefits of wealth diminish at higher levels, suggesting that beyond a certain point, additional wealth contributes less to happiness. This aligns with the hypothesis that the relationship between wealth and SWB is not linear, as diminishing returns set in as wealth increases. In addition to wealth, other socio-economic factors play an important role in shaping SWB. Marital status appears as a strong determinant, with married individuals reporting significantly higher levels of well-being compared to their unmarried counterparts. Employment status is also positively associated with SWB, highlighting the importance of financial stability and psychological happiness. In contrast, chronic illnesses are negatively correlated with SWB, emphasizing the critical role of health in determining quality of life. This research contributes to the growing literature on well-being by providing localized insights into the wealth-SWB relationship in Kyrgyzstan. The findings suggest that while wealth accumulation is a key driver of SWB, policies aimed at improving well-being must also address broader socio-economic factors such as health, employment, and marital stability. By integrating these considerations, policymakers in Kyrgyzstan and similar emerging economies can better promote sustainable improvements in well-being.