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Individual Wellbeing in a Dynamic Perspective

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  • Conchita D'Ambrosio
  • Joachim R. Frick

Abstract

This paper explores the determinants of individual well-being as measured by self-reported levels of satisfaction with income. Making full use of the panel data nature of the German Socio-Economic Panel, we provide empirical evidence for well-being depending on absolute and on relative levels of income in a dynamic framework. This finding holds after controlling for other influential factors in a multivariate setting. The main novelty of the paper is the consideration of dynamic aspects: the individual's own history as well as the relative income performance with respect to the others living in the society under analysis do play a major role in the assessment of well-being.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 79 (2012)
Issue (Month): 314 (04)
Pages: 284-302

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Handle: RePEc:bla:econom:v:79:y:2012:i:314:p:284-302

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References

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Citations

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Cited by:
  1. Felix, FitzRoy & Michael, Nolan & Max, Steinhardt & David, Ulph, 2013. "Testing the Tunnel Effect: Comparison, Age and Happiness in UK and German Panels," SIRE Discussion Papers 2013-29, Scottish Institute for Research in Economics (SIRE).
  2. Hodkinson, Brennan & Visser, Martine, 2013. "Effects of Objective and Subjective Income Comparisons on Subjective Wellbeing," SALDRU Working Papers 118, Southern Africa Labour and Development Research Unit, University of Cape Town.
  3. Stefano Bartolini & Ennio Bilancini & Francesco Sarracino, 2013. "Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?," Social Indicators Research, Springer, vol. 114(2), pages 169-191, November.
  4. Marco de Pinto, 2012. "The Redistribution of Trade Gains and the Equity-Efficiency Trade-Off," IAAEU Discussion Papers 201206, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  5. Santiago Budria, 2013. "Are Relative-Income Effects Constant Across the Well-Being Distribution?," Journal of Happiness Studies, Springer, vol. 14(4), pages 1379-1408, August.
  6. Andrew E. Clark, 2008. "Happiness, habits and high rank: Comparisons in economic and social life," PSE Working Papers halshs-00586049, HAL.
  7. Adrian Chadi, 2013. "The Role of Interviewer Encounters in Panel Responses on Life Satisfaction," IAAEU Discussion Papers 201311, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  8. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute for the Study of Labor (IZA).
  9. Adrian Chadi, 2014. "Dissatisfied with Life or with Being Interviewed? Happiness and Motivation to Participate in a Survey," IAAEU Discussion Papers 201403, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  10. Hyll, Walter & Schneider, Lutz, 2014. "Relative deprivation and migration preferences," Economics Letters, Elsevier, vol. 122(2), pages 334-337.
  11. Vendrik, Maarten C.M., 2013. "Adaptation, anticipation and social interaction in happiness: An integrated error-correction approach," Journal of Public Economics, Elsevier, vol. 105(C), pages 131-149.

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