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A Regression Analysis Investigating the Relationship between Income and Happiness
Kaila Babaylan
Randy Guantero Jr.
St. Rita’s College of Balingasag
October 7, 2021
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I. BACKGROUND
Are wealthier people happier? This question has been widely asked among economists and socialists in
this contemporary society. In general, people firmly believe that if they have more money, their life would be
much better. A research study conducted by Schnittker (2008) found that the correlation between income and
happiness is always understood in terms of income allowing people to enjoy their life and consume goods to
fulfill their needs and increase their well-being. Therefore, money and happiness are highly linked, and usually
it is believed that people with higher income are happier than people with lower income. There have been
extensive research related to the relationship between income and happiness. Most of the evidence indicates that
there is a positive relationship between income and happiness (Schnittker, 2008).
The purpose of this research study is to confirm the positive relationship between income and happiness.
RESEARCH QUESTION:
Is there a significant difference between income and happiness?
HYPOTHESES:
Null:
There is no significant difference between income and happiness.
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Alternative:
There is a significant difference between income and happiness .
II. METHODOLOGY
DATA COLLECTION:
(Mention if the data is a primary or secondary data)
The data used in performing the study is a secondary data. The provided data will be then analyzed,
interpreted and concluded with the use of a statistical tool.
STATISTICAL TREATMENT
One Way Analysis of Variance/Two Factor Analysis of Variance with Interaction Effect
(Briefly describe the statistical Treatment)
The research study used Linear regression analysis in analyzing and interpreting the provided data. We
used Linear regression analysis to describe the relationship between variables (independent - income) and
(dependent – happiness) by fitting a line to the observed data in order to determine whether there is statistical
evidence that the associated given data are significantly different.
III. RESULTS & DISCUSSION
(Discuss the result of your analysis in this portion. Include table of your results. Include also plots)
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From the linear regression analysis results, in the coefficients the first row gives the estimates of the y-
intercept (happiness) of the regression equation with a value of 0.20 while the second row gives the regression
coefficient of the model. In the coefficients, the second row (income) describes the estimated effect of income on
reported happiness. The number in the table (0.713) tells us that for every one unit increase in income there is a
corresponding 0.71 unit increase in reported happiness. The number in the p-value tells us how likely we are to
see the estimated effect of income on happiness if the null hypothesis of no significant effect were true. The
resulted p-value is so low (p<0.001), therefore the null hypothesis is disconfirmed and conclude that income has
a statistically significant effect on happiness.
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Base on the resulted linear plot, the graph shows that there is a positive linear relationship or a positive correlation
between the two variables – income and happiness. But this relationship does not necessarily imply cause and
effect but it means that as one variable - income increases, the other variable - happiness also increases.
IV. CONCLUSION & RECOMMENDATION
Based on the results obtained from the linear regression analysis, the null hypothesis is disconfirmed and we can
accept the alternative hypothesis. This means that there is strong evidence that income has a statistically
significant effect on happiness.
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Reference: https://www.scribbr.com/statistics/simple-linear-regression/
https://www.cedu.niu.edu/walker/statistics
Approved with a score of: ________
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GERNEL S. LUMACAD
Research Teacher
