Abstract: This panel study examined the dynamic relationship between family income and life satisfaction among 21 cities and counties from 2004 to 2010. Results of multivariate multilevel growth models indicated that average income had a positive impact on average life satisfaction at county level. A negative correlation was found between the original income and life satisfaction growth. In addition, there was negative correlation between average income rate of growth and average life satisfaction rate of growth. Findings were discussed concerning their practical implications in order to improve the general happiness of the Chinese people in economic development recent years.

Key words: family income, life satisfaction, panel study