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Well-being Inequality and Reference Groups - An Agenda for New Research

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  • Bernard M.S. Van Praag

Abstract

It is argued that the concept of well –being inequality cannot be properly defined without taking the referencing process into account. The reference effect depends on how frequently individuals compare with others and on the degree of social transparency in society. In this paper we employ the reference- extended model for incorporating the concept of happiness inequality in happiness studies.We plead for an extension of the present happiness paradigm by setting up a new additional agenda for empirical research in order to get quantified knowledge about the referencing process.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2984.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_2984

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Keywords: subjective well being; happiness; inequality; reference group;

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References

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  1. Ada Ferrer-i-Carbonell & Bernard M.S. Van Praag, 2002. "Income Satisfaction Inequality and its Causes," Tinbergen Institute Discussion Papers 02-014/3, Tinbergen Institute.
  2. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
  3. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
  4. Praag, B.M.S. van & Herwaarden, F.G. van & Kapteyn, A.J., 1979. "The definition and measurement of social reference spaces," Open Access publications from Tilburg University urn:nbn:nl:ui:12-361904, Tilburg University.
  5. Kapteyn, Arie & Van Praag, Bernard M. S. & Van Herwaarden, Floor G., 1978. "Individual welfare functions and social reference spaces," Economics Letters, Elsevier, vol. 1(2), pages 173-177.
  6. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  7. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 89-109, May.
  8. Hagenaars, Aldi J M & van Praag, Bernard M S, 1985. "A Synthesis of Poverty Line Definitions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(2), pages 139-54, June.
  9. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
  10. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
  11. Senik, Claudia, 2004. "When information dominates comparison: Learning from Russian subjective panel data," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2099-2123, August.
  12. Bernard Praag, 2011. "Well-being inequality and reference groups: an agenda for new research," Journal of Economic Inequality, Springer, vol. 9(1), pages 111-127, March.
  13. Clark, Andrew E. & Senik, Claudia, 2009. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," IZA Discussion Papers 4414, Institute for the Study of Labor (IZA).
  14. Claudia Senik, 2008. "Direct evidence on income comparisons and their welfare effects," PSE Working Papers halshs-00588023, HAL.
  15. Van Praag, Bernard M.S., 1977. "The perception of welfare inequality," European Economic Review, Elsevier, vol. 10(2), pages 189-207.
  16. Easterlin, Richard A., 2006. "Life cycle happiness and its sources: Intersections of psychology, economics, and demography," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 463-482, August.
  17. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
  18. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  19. Christoph Wunder & Andrea Wiencierz & Johannes Schwarze & Helmut Küchenhoff & Sara Kleyer & Philipp Bleninger, 2009. "Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data," Discussion Papers of DIW Berlin 889, DIW Berlin, German Institute for Economic Research.
  20. Christoph Wunder & Andrea Wiencierz & Johannes Schwarze & Helmut Küchenhoff & Sara Kleyer & Philipp Bleninger, 2009. "Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data," SOEPpapers on Multidisciplinary Panel Data Research 179, DIW Berlin, The German Socio-Economic Panel (SOEP).
  21. Carol Graham & Andrew Felton, 2006. "Inequality and happiness: Insights from Latin America," Journal of Economic Inequality, Springer, vol. 4(1), pages 107-122, April.
  22. Wunder, Christoph & Wiencierz, Andrea & Schwarze, Johannes & Küchenhoff, Helmut & Kleyer, Sara & Bleninger, Philipp, 2009. "Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data," IZA Discussion Papers 4155, Institute for the Study of Labor (IZA).
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Well-Being Inequality and Reference Groups – An Agenda for New Research
    by maximorossi in NEP-LTV blog on 2010-09-28 20:13:06
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Barbara Dluhosch & Daniel Horgos, 2013. "Trading Up the Happiness Ladder," Social Indicators Research, Springer, vol. 113(3), pages 973-990, September.
  2. Krzysztof Zagorski & Mariah Evans & Jonathan Kelley & Katarzyna Piotrowska, 2014. "Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality, Happiness, Finances, and Health," Social Indicators Research, Springer, vol. 117(3), pages 1089-1110, July.
  3. van Praag, Bernard M. S., 2010. "Well-being Inequality and Reference Groups: An Agenda for New Research," IZA Discussion Papers 4727, Institute for the Study of Labor (IZA).
  4. J.ntti, Markus & Kanbur, Ravi & Nyyss.l., Milla & Pirttil., Jukka, 2012. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Edsel Beja, 2014. "Yet, Two More Revisions to the Human Development Index," Forum for Social Economics, Taylor & Francis Journals, vol. 43(1), pages 27-39, April.
  6. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs, Spanish Economic Association, vol. 4(1), pages 35-60, March.
  7. Silber, Jacques & Verme, Paolo, 2012. "Relative deprivation, reference groups and the assessment of standard of living," Policy Research Working Paper Series 5930, The World Bank.
  8. repec:hal:wpaper:halshs-00707290 is not listed on IDEAS
  9. Cristina Bernini & Andrea Guizzardi & Giovanni Angelini, 2013. "DEA-Like Model and Common Weights Approach for the Construction of a Subjective Community Well-Being Indicator," Social Indicators Research, Springer, vol. 114(2), pages 405-424, November.
  10. Clark, Andrew E. & Flèche, Sarah & Senik, Claudia, 2012. "The Great Happiness Moderation," IZA Discussion Papers 6761, Institute for the Study of Labor (IZA).
  11. Wen-Chun Chang, 2013. "Climbing up the Social Ladders: Identity, Relative Income, and Subjective Well-being," Social Indicators Research, Springer, vol. 113(1), pages 513-535, August.
  12. Owen, Ann & Phillips, Anne, 2013. "Education, income, and the distribution of happiness," MPRA Paper 49387, University Library of Munich, Germany.
  13. Lohmann, Steffen, 2013. "Information technologies and subjective well-being: Does the internet raise material aspirations?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79708, Verein für Socialpolitik / German Economic Association.
  14. Leonardo Becchetti & Fabio Pisani, 2014. "Family Economic Well-Being, and (Class) Relative Wealth: An Empirical Analysis of Life Satisfaction of Secondary School Students in Three Italian Cities," Journal of Happiness Studies, Springer, vol. 15(3), pages 503-525, June.

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