Karma Galay, Sr. Researcher,   cbs@druknet.bt

Living standard is one of the important determinants of wellbeing or happiness. Obviously, improvement of living standard constitutes the most important objective of plans and programs of both developed and developing countries. Given this important role in actualizing the overall wellbeing of their citizens, it has been (and continues to be) a subject widely studied by various disciplines and agencies: governmental, non-governmental, multilateral, academic, etc. These studies also have a variety of themes, with poverty being the most common one. Studies on poverty have looked at its “causes, effects, and prevalence” and the extent to which it improved or worsened following change in government policies and programs. Inequality was another popular theme. These studies looked at the width of disparity in living standards between rich and poor, sub-populations, ethnic groups, and other social characteristics. Studies have also focused on how living standards have changed over time.

Following the framework of past studies, this paper will study the relationship between the economic living standards of people and their reported level of happiness. This study goes a step further from the past studies in that it also looks at how non-cash income affects the wellbeing of people.