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Heterogeneity in reported well-being: evidence from twelve european countries

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Author Info
Andrew E. Clark
Fabrice Etilé
Fabien Postel-Vinay
Claudia Senik
Karine Van der Straeten

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Abstract

This paper models the relationship between income and self-reported well-being using random-effect techniques applied to panel data from twelve European countries. We cannot distinguish empirically between heterogeneities in the utility function (translating income into utility) and the expression function (turning utility into self-reported well-being), but we strongly reject the hypothesis that individuals carry out these joint transformations in the same way. The "marginal well-being effect of income" is very different in the four classes we identify; we thus expect preferences for redistribution and behaviour to be different across these classes. Our results suggests that aggregating data across diverse populations, and countries, may be a dangerous practice.

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2004-01.

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Date of creation: 2004
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Handle: RePEc:del:abcdef:2004-01

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  1. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, vol. 21(4), pages 601-625, July. [Downloadable!] (restricted)
  2. repec:cep:sticas:059 is not listed on IDEAS
  3. Tinbergen, Jan, 1991. "On the measurement of welfare," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 7-13, October. [Downloadable!] (restricted)
  4. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
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  5. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-41, May. [Downloadable!] (restricted)
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  6. 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.
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  7. Alois Stutzer & Bruno S. Frey, . "Does Marriage Make People Happy, Or Do Happy People Get Married?," IEW - Working Papers iewwp143, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  8. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July. [Downloadable!] (restricted)
  9. Robin, J.M. & Smith, R.J., 1995. "Tests of Rank," Cambridge Working Papers in Economics 9521, Faculty of Economics, University of Cambridge.
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    • Robin, Jean-Marc & Smith, Richard J., 2000. "Tests Of Rank," Econometric Theory, Cambridge University Press, vol. 16(02), pages 151-175, April. [Downloadable!]
  10. Clark, Andrew E., 2001. "What really matters in a job? Hedonic measurement using quit data," Labour Economics, Elsevier, vol. 8(2), pages 223-242, May. [Downloadable!] (restricted)
  11. Richard E. Lucas & Andrew Clark & Yannis Georgellis & Ed Diener, 2002. "Re-Examining Adaptation and the Setpoint Model of Happiness: Reactions to Changes in Marital Status," DELTA Working Papers 2002-08, DELTA (Ecole normale supérieure). [Downloadable!]
  12. Claudia Senik, 2004. "Relativizing relative income," DELTA Working Papers 2004-17, DELTA (Ecole normale supérieure). [Downloadable!]
  13. Stephen Pudney & Michael Shields, . "Gender, Race, Pay and Promotion in the British Nursing Profession: Estimation of a Generalised Ordered Probit Model," Discussion Papers in Public Sector Economics 97/4, Department of Economics, University of Leicester.
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  14. Edward Morey & Kathleen Greer Rossmann, 2003. "Using Stated-Preference Questions to Investigate Variations in Willingness to Pay for Preserving Marble Monuments: Classic Heterogeneity, Random Parameters, and Mixture Models," Journal of Cultural Economics, Springer, vol. 27(3), pages 215-229, November. [Downloadable!] (restricted)
  15. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February. [Downloadable!] (restricted)
  16. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
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  1. Fabrice Etilé, 2006. "Who does the hat fit? Teenager heterogeneity and the effectiveness of information policies in preventing cannabis use and heavy drinking," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 697-718. [Downloadable!]
  2. Andrew E. Clark & Claudia Senik, 2004. "The (unexpected) structure of "rents" on the French and British labour markets," DELTA Working Papers 2004-06, DELTA (Ecole normale supérieure). [Downloadable!]
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  3. Jose Alberto Molina & Maria Navarro & Ian Walker, 2007. "Mums and their sons; Dads and their daughters: Panel Data Evidence of Parental Altruism across 14 EU Countries," Working Papers 200721, Geary Institute, University College Dublin. [Downloadable!]
  4. Davis, Lewis & Owen, Ann L. & Videras, Julio, 2007. "Do all countries follow the same growth process?," MPRA Paper 11589, University Library of Munich, Germany, revised Sep 2008. [Downloadable!]
  5. Lelkes, Orsolya, 2008. "Happiness over the life cycle: exploring age-specific preferences," MPRA Paper 7302, University Library of Munich, Germany. [Downloadable!]
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  7. Leonardo Becchetti & Luisa Corrado & Fiammetta Rossetti, 2008. "Easterlin-types and Frustrated Achievers: the Heterogeneous E¤ects of Income Changes on Life Satisfaction," CEIS Research Paper 127, Tor Vergata University, CEIS, revised 09 Sep 2008. [Downloadable!]
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  8. José Alberto Molina & María Navarro & Ian Walker, 2007. "Mums and Their Sons, Dads and Their Daughters: Panel Data Evidence of Interdependent Marginal Utilities across 14 EU Countries," IZA Discussion Papers 2734, Institute for the Study of Labor (IZA). [Downloadable!]
  9. André van Hoorn & Robbert Maseland, 2008. "Weber, Work Ethic And Well-Being," Papers on Economics of Religion 08/07, Department of Economic Theory and Economic History of the University of Granada.. [Downloadable!]
  10. Namkee Ahn & Juan Ramón García, . "Job Satisfaction in Europe," Working Papers 2004-16, FEDEA. [Downloadable!]
  11. Boes, Stefan & Winkelmann, Rainer, 2004. "Income and Happiness: New Results from Generalized Threshold and Sequential Models," IZA Discussion Papers 1175, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Andrew E. Clark & Claudia Senik, 2008. "Who compares to whom? The anatomy of income comparisons in Europe," PSE Working Papers 2008-65, PSE (Ecole normale supérieure), revised Sep 2009. [Downloadable!]
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  13. Teresa Bago d'Uva, 2005. "Latent class models for use of primary care: evidence from a British panel," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 873-892. [Downloadable!]
  14. Kaminski, Jonathan, 2008. "Wealth, Living Standards and Perceptions in a Cotton Economy: Evidence from the Cotton Reform in Burkina Faso," Discussion Papers 45780, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
  15. Andrew E. Clark & Claudia Senik, 2007. "La croissance rend-elle heureux ? La réponse des données subjectives," PSE Working Papers 2007-06, PSE (Ecole normale supérieure). [Downloadable!]
  16. Inmaculada García & José Molina & María Navarro, 2007. "How Satisfied are Spouses with their Leisure Time? Evidence from Europe," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 546-565, December. [Downloadable!] (restricted)
  17. Teresa Bago d'Uva & Andrew M. Jones & Eddy van Doorslaer, 2007. "Measurement of Horizontal Inequity in Health Care Utilisation using European Panel Data," Tinbergen Institute Discussion Papers 07-059/3, Tinbergen Institute. [Downloadable!]
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