Absolute income theory is an economic theory that suggests that an individual's level of satisfaction and well-being is determined by their absolute level of income, rather than their income relative to others. In other words, individuals are happier and more satisfied when their income is higher, regardless of how it compares to others in society. This theory contrasts with relative income theory, which posits that individuals compare their income to that of others and that their well-being is influenced by this comparison.
