Advanced Search
MyIDEAS: Login

Income–happiness paradox in Australia: Testing the theories of adaptation and social comparison

Contents:

Author Info

  • Paul, Satya
  • Guilbert, Daniel

Abstract

This paper investigates whether the theories of adaptation and social comparison can explain the income–happiness puzzle (Easterlin Paradox) in Australia. Alternative specifications of happiness model that incorporate adaption, comparison incomes and other relevant variables are estimated using the panel data from the five waves (2001–2005) of the Household Income and Labour Dynamics in Australia (HILDA) surveys. The statistical tests provide no support for the adaptation effect on happiness. However, we find strong support for the theory of social comparison as an explanation for the happiness paradox. An increase in peer group income hurts the poor more than the rich, suggesting that a redistribution of income is likely to enhance the overall wellbeing of society. A sensitivity analysis is conducted to check the robustness of results.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0264999312003483
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 30 (2013)
Issue (Month): C ()
Pages: 900-910

as in new window
Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:900-910

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Life satisfaction; Adaptation; Comparison income; Easterlin paradox;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Beja Jr., Edsel, 2014. "Income growth and happiness: Reassessment of the Easterlin Paradox," MPRA Paper 53360, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:900-910. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.