Understanding the Linkages Between Economic and Psychological Well-being

Human behaviour is determined by an individual's psychology. However, the psychological well-being is affected by the surroundings and conditions that an individual lives in. an important determinant of these conditions is the level of economic resources and endowments. The study has attempted to look at the linkages between economic deprivation and its impact on psychological well-being. Well-being has been understood through both the hedonic and eudemonic approach. Deprivation is also understood through two perspectives: objective or absolute deprivation and subjective or relative deprivation. The elements of psychological well-being such as hope, motivation, enthusiasm, drive for achievement and selfrealisation are all impacted by the level of economic endowments and by the perception of the individuals about where the endowments are adequate or not. The psychological effects of poverty and why poverty will exist has also been mentioned in the study. The study concludes that a certain basic level of economic endowment is necessary to preserve the psychological wellbeing of an individual. So the absence of this certainly negatively affects the individual's mind. However, beyond a certain level, affluence may itself become a cause of stress and may not contribute to an individual's eudemonic goals as effectively as before.