After the emergence of Smith's theory，the mainstream economic theories take wealth or income as the premise for people getting happiness，the level of income is regarded as an indirect measure of welfare as a major indicator of the level，making all economic policies to improve social welfare，and finally will due to long-term economic growth.However，the happiness survey evidence shows that economic growth can hardly improve the welfare of the residents when the economy develops to a certain extent，and the level of happiness tends to a stable value，economists call it the “happiness-income puzzle”，“happiness paradox” or “Easterlin paradox”.In the case of China，the World Values Survey data show the same phenomenon also exists in China.So，what causes the puzzle was happened in China？ What is its mechanism？ This article will conduct empirical research about this issue.

In this dissertation，we used four chapters to test the mechanism of China's “happiness-income puzzle”.Firstly，estimate the relationship and mechanism between income inequality and residents’ subjective well-being in China.Our results show that income inequality has negative effects on residents’ subjective well-being significantly.Due to the historical tradition of “Not afraid get less，but afraid unequal distribution” and the “socialism ideology”，which makes Chinese people showed a significant aversion to income inequality.Moreover，in addition to the significant negative impact of income inequality on Chinese people's happiness，the income gap is too large，especially unreasonable，unfair income disparities directly affect the peace of mind of members in the community，leading to psychological imbalance and a strong sense of loss，the breeding of social discontent，the formation of social instability and crime factors，these criminal activities will further the negative impact of income inequality on residents’ happiness.

Secondly，estimate the relationship between social immobility，inequality of and residents’ subjective well-being in China.Results show that the negative happiness effects of downward mobility （-0.070 points）is much greater than the positive effects of the upward mobility （0.045 points），which in some extent to explain China's current “happiness-income puzzle”.Because of social class curing more serious，growing channel for upward mobility blocked，the rest of the social class status neither not mobile nor downward mobile，which leads to overall population decline in average happiness.At the same time，in the process of social mobility is associated with inequality of opportunity generally.Because society does not mobile，it will mean a lot of people can't be successfully underlying upward mobility，which is the loss of opportunity，this dissertation found that inequality of opportunity between different social class is the main reason leading to unhappy.

Thirdly，estimate the relationship government quality and residents’ subjective well-being in China.Results show that corruption has negative effects on residents’ subjective well-being significantly，because corruption is a bad “climate”，it may destruct the equity and justice of society and stimulate residents’ inner discontent.In addition，the effects of corruption on happiness also through change the informal system （interpersonal trust level）to achieve.Corruption will lead to residents don't trust government agencies and government's staff.The loss of interpersonal trust means that the protection of informal system was ruptured.Residents continue to lower the sense of security，making them difficult to feel happy.

Finally，test the Chinese-style decentralization impact on the residents’ happiness.Chinese-style decentralization resulted in distortion of the structure of fiscal expenditure，local government pay more attention to investment spending than public services and human capital investment expenditures，which almost has become the consensus of scholars.However，so far，scholars are not peculiar to the depth of this discussion，that Chinese-style decentralization tend to distort the structure of expenditures，and how residents’ social psychology，life satisfaction and subjective well-being were effect by this situation？ Results show that fiscal decentralization has negative effects on residents’ subjective well-being significantly，and primarily due to the distortion of the structure of public expenditure caused.Therefore，increase the proportion of social expenditure is a way to solve the “happiness-income puzzle” in China.

Key words：subjective well-being“happiness-income puzzle”income inequalityChinese-style decentralization