The color yellow can be used to symbolize many things depending on the context of the story. In the case of "The Yellow Wallpaper", you have to consider the treatment of the main character. She is treated as weak and sickly, which yellow is often used to symbolize. For instance, a sickly baby who is jaundiced is yellow and a cowardly person is often labeled as yellow. In this case, the protagonist is seen by both her husband and sister-in-law as weak, both mentally and physically. Thus, the choice of yellow is an appropriate symbol for the wallpaper that becomes her obsession. The wallpaper also has other characteristics that seem to represent the main character. It contains "pointless patterns" and "lame uncertain curves". These descriptions also point to a weak woman. Then the pattern takes off into "outrageous angles" and seems to destroy itself " in unheard of contradictions." Once again, the wallpaper mirrors the behavior of the woman, who is slowly going insane because she is not allowed to make any of her own decisions. As "Elaine R. Hedges wrote in the afterword to the 1973 edition of the story that "the paper symbolizes [the narrator's] situation as seen by the men who control her and hence her situation as seen by herself. How can she define herself?"
To add to the relevant ideas above, generally, yellow in literature is the color of evil. Having been placed in the room by her cruel husband, perhaps the woman projects her husband's evil act into the wallpaper. Certainly, obsessive people often transfer their anxieties, insecurities, etc. onto insignificant things. For example, Lady Macbeth focuses her guilt onto the "damn spot" of blood that she cannot seem to clean from the stairs of the castle.