Factors affecting psychological well-being: Evidence from two nationally representative surveys

Area of Science:

• Socioeconomic impacts on mental health
• Longitudinal panel data analysis
• Psychological well-being measurement

Background:

• Financial status is a recognized determinant of psychological well-being.
• Previous studies often link income levels directly to mental health outcomes.
• Unobservable heterogeneity can confound the relationship between financial status and well-being.

Purpose of the Study:

• To investigate the relationship between financial status and psychological well-being using advanced statistical methods.
• To identify specific financial factors influencing psychological well-being beyond income.
• To control for unobservable heterogeneity in longitudinal data.

Main Methods:

• Utilized a parametric mixed modelling approach for longitudinal panel data.
• Employed data from the British Household Panel Survey (BHPS) and Understanding Society Survey (USS).
• Assessed psychological well-being using the 12-item General Health Questionnaire (GHQ-12).
• Applied growth curve modelling, natural splines, and B-splines for robust analysis.

Main Results:

• Perception of future financial situation and problems meeting household expenditure were the most significant predictors of psychological well-being.
• Demographic factors including gender, age, marital status, number of children, education, and job status were also significant.
• Contrary to previous research, the absolute size of income was not found to be a significant factor.

Conclusions:

• Financial concerns, particularly future outlook and expenditure challenges, profoundly affect psychological well-being.
• Psychological well-being is influenced by a complex interplay of financial perceptions and demographic characteristics.
• The study highlights the importance of subjective financial assessments over objective income measures in understanding mental health.