does increase in household income necessary translate into improved welbeing of all members?

Answer 1

No it doesn't, because it only does so if two conditions are met: (1) that people in the household enjoy what more money can buy; and (2) that there is harmony within the household about how the extra income is used.

The first condition looks 'trivial' at a glance, but is not. Surveys have often shown that there is no consistent relationship between greater income and greater happiness. If an increase in income leads to an increase in worries it is a source of distress, not wellbeing.

The second condition is more obvious. Suppose a woman gets a promotion which result in her earning more than her husband, for the first time since their marriage. In some families, that would lead to resentment and jealousy on his part. Or suppose in a poor family a young person gets a job when previously no-one was employed. There may be tensions within that person or between them and their parents as to how much of the income that person keeps and how much is shared.

Answer 2

That is a tough question for an economist to answer. It can be difficult to monetize wellbeing. Also, economists don't usually divide households into individuals. To answer the question the best I can, Yes, an increase in HH income is associated with improved wellbeing of the members who make up the HH. HH income is probably a good indicator of individual wellbeing.

Answer 3

Sometimes, yes. But not always. A lot of people work harder or longer and do start to brng in more money. But then they blow the extra money on things they don't really need becuase they think the deserve it. In that situation, the family still ends up with the same house, the same schools, the same household services, they just have nicer clothes or a nicer car. They don't think of long term and their futures.

Answer 4

not necessarily the more you earn the more you need but rich people live more comfortable lives..