Do reference values matter? Some notes and extensions on "income and happiness across Europe"
AbstractWe add to the analysis conducted in an article in this journal authored by Caporale, Georgellis, Tsitsianis, and Yin (2009) (hereafter CGTY) which assessed the relationship between subjective well-being, income and relative income in Europe. Specifically, we note some data management, model/variable specification, and econometric issues that can affect the validity of the findings of CGTY. We then present our own augmented model to test the robustness of the results from the CGTY study. When we try to replicate CGTY's estimation, we find that the main variable of interest, i.e. the reference income variable, reverts sign. We also find several differences in our results, the most important of which is that, in contrast to CGTY's result that suggests a statistically significant negative reference income effect on life satisfaction, reference income does not really significantly affect life satisfaction in our estimations.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Psychology.
Volume (Year): 31 (2010)
Issue (Month): 4 (August)
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Web page: http://www.elsevier.com/locate/joep
Comparison income Reference groups Happiness Life satisfaction;
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- Caporale, Guglielmo Maria & Georgellis, Yannis & Tsitsianis, Nicholas & Yin, Ya Ping, 2009.
"Income and happiness across Europe: Do reference values matter?,"
Journal of Economic Psychology,
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IZA Discussion Papers
7452, Institute for the Study of Labor (IZA).
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- FitzRoy, Felix & Nolan, Michael A. & Steinhardt, Max, 2011.
"Age, Life-Satisfaction, and Relative Income: Insights from the UK and Germany,"
IZA Discussion Papers
6045, Institute for the Study of Labor (IZA).
- Felix F. FitzRoy & Michael A. Nolan & Max F. Steinhardt, 2011. "Age, Life-satisfaction, and Relative Income-Insights from the UK and Germany," Discussion Paper Series, Department of Economics 201105, Department of Economics, University of St. Andrews.
- Felix R., FitzRoy & Michael, Nolan & Max F., Steinhardt, 2013. "Age, Life-satisfaction, and Relative Income – Insights from the UK and Germany," SIRE Discussion Papers 2013-51, Scottish Institute for Research in Economics (SIRE).
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