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Happiness, Habits and High Rank: Comparisons in Economic and Social Life

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  • Andrew E. Clark

Abstract

The role of money in producing sustained subjective well-being seems to be seriously compromised by social comparisons and habituation. But does that necessarily mean that we would be better off doing something else instead? This paper suggests that the phenomena of comparison and habituation are actually found in a considerable variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 452.

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Length: 40 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp452

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Keywords: Comparison; habituation; income; unemployment; marriage; divorce; health; religion; policy;

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References

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  1. repec:pse:psecon:2010-43 is not listed on IDEAS
  2. van Praag, Bernard M. S. & Baarsma, Barbara E., 2004. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," IZA Discussion Papers 1096, Institute for the Study of Labor (IZA).
  3. David G. Blanchflower & Andrew J. Oswald & Bert Van Landeghem, 2008. "Imitative Obesity and Relative Utility," NBER Working Papers 14337, National Bureau of Economic Research, Inc.
  4. Melenberg, B., 1992. "Micro-econometric models of consumer behaviour and welfare," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3508638, Tilburg University.
  5. D'Ambrosio, Conchita & Frick, Joachim R., 2007. "Individual Well-Being in a Dynamic Perspective," IZA Discussion Papers 2618, Institute for the Study of Labor (IZA).
  6. Clark, Andrew E. & Diener, Ed & Georgellis, Yannis & Lucas, Richard E., 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," CEPREMAP Working Papers (Docweb) 0803, CEPREMAP.
  7. 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, DELTA (Ecole normale supérieure) 2002-08, DELTA (Ecole normale supérieure).
  8. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  9. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
  10. Claudia Senik, 2002. "When Information Dominates Comparison: A Panel Data Analysis Using Russian Subjective Data," William Davidson Institute Working Papers Series 495, William Davidson Institute at the University of Michigan.
  11. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," NBER Working Papers 14282, National Bureau of Economic Research, Inc.
  12. Clark, Andrew E. & Senik, Claudia, 2009. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," CEPREMAP Working Papers (Docweb) 0907, CEPREMAP.
  13. repec:hal:wpaper:halshs-00566120 is not listed on IDEAS
  14. Clark, Andrew E. & Etilé, Fabrice, 2010. "Happy House: Spousal Weight and Individual Well-Being," CEPREMAP Working Papers (Docweb) 1001, CEPREMAP.
  15. Daniel J. ZIZZO & Andrew J. OSWALD, 2001. "Are People Willing to Pay to Reduce Others'Incomes?," Annales d'Economie et de Statistique, ENSAE, issue 63-64, pages 39-65.
  16. N Powdthavee, 2008. "Ill-Health as a Household Norm: Evidence from Other People's Health Problems," Discussion Papers, Department of Economics, University of York 08/21, Department of Economics, University of York.
  17. Clark, Andrew E. & Kristensen, Nicolai & Westergård-Nielsen, Niels C., 2007. "Job Satisfaction and Co-worker Wages: Status or Signal?," IZA Discussion Papers 3073, Institute for the Study of Labor (IZA).
  18. Clark, Andrew E., 1999. "Are wages habit-forming? evidence from micro data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 179-200, June.
  19. Bruno Frey & Alois Stutzer, 2000. "Happiness Prospers in Democracy," Journal of Happiness Studies, Springer, Springer, vol. 1(1), pages 79-102, March.
  20. repec:pse:psecon:2009-01 is not listed on IDEAS
  21. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Economic Satisfaction and Income Rank in Small Neighbourhoods," Journal of the European Economic Association, MIT Press, MIT Press, vol. 7(2-3), pages 519-527, 04-05.
  22. Fliessbach, Klaus & Weber, Bernd & Trautner, P. & Dohmen, Thomas J. & Sunde, Uwe & Elger, C. E. & Falk, Armin, 2007. "Social comparison affects reward-related brain activity in the human ventral striatum," Munich Reprints in Economics, University of Munich, Department of Economics 20362, University of Munich, Department of Economics.
  23. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  24. John Knight & Lina Song, 2007. "Subjective Well-being and its Determinants in Rural China," Economics Series Working Papers 334, University of Oxford, Department of Economics.
  25. Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  26. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(424), pages 648-59, May.
  27. Andrew E. Clark & Orsolya Lelkes, 2009. "Let us pray: religious interactions in life satisfaction," PSE Working Papers halshs-00566120, HAL.
  28. Wu, Stephen, 2001. "Adapting to heart conditions: a test of the hedonic treadmill," Journal of Health Economics, Elsevier, vol. 20(4), pages 495-507, July.
  29. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 834-852, December.
  30. Clark, Andrew E. & Oswald, Andrew J., 1998. "Comparison-concave utility and following behaviour in social and economic settings," Journal of Public Economics, Elsevier, vol. 70(1), pages 133-155, October.
  31. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(479), pages 362-383, April.
  32. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
  33. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2005. "How much do we care about absolute versus relative income and consumption?," Journal of Economic Behavior & Organization, Elsevier, vol. 56(3), pages 405-421, March.
  34. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 21(2), pages 289-322, April.
  35. Clark, Andrew E. & Senik, Claudia, 2010. "Will GDP Growth Increase Happiness in Developing Countries?," CEPREMAP Working Papers (Docweb) 1024, CEPREMAP.
  36. Frank, Robert H. & Hutchens, Robert M., 1993. "Wages, seniority, and the demand for rising consumption profiles," Journal of Economic Behavior & Organization, Elsevier, vol. 21(3), pages 251-276, August.
  37. Bruno S. Frey & Alois Stutzer, . "Maximising Happiness?," IEW - Working Papers 022, Institute for Empirical Research in Economics - University of Zurich.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Happiness, Habits and High Rank: Comparisons in Economic and Social Life
    by maximorossi in NEP-LTV blog on 2011-09-26 14:34:45
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Becchetti, Leonardo & Pisani, Fabio, 2012. "Family money, relational life and (class) relative wealth: an empirical analysis on life satisfaction of secondary school students," AICCON Working Papers, Associazione Italiana per la Cultura della Cooperazione e del Non Profit 101-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
  2. Andrew E. Clark & Fabrice Etilé, 2010. "Happy House: Spousal Weight and Individual Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 349, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. 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, Springer, vol. 15(3), pages 503-525, June.
  4. Jones, A.; & Rice, N.; & Rosa Dias, P., 2010. "Long-term effects of cognitive skills, social adjustment and schooling on health and lifestyle: Evidence from a reform of selective schooling," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 10/11, HEDG, c/o Department of Economics, University of York.
  5. repec:hal:wpaper:halshs-00590436 is not listed on IDEAS
  6. Temesgen Kifle, 2014. "Do Comparison Wages Play a Major Role in Determining Overall Job Satisfaction? Evidence from Australia," Journal of Happiness Studies, Springer, Springer, vol. 15(3), pages 613-638, June.
  7. Van Landeghem, Bert & Swinnen, Johan F.M. & Vranken, Liesbet, 2008. "Land and Happiness: Land Distribution and Subjective Well-Being in Moldova," 2008 International Congress, August 26-29, 2008, Ghent, Belgium, European Association of Agricultural Economists 44375, European Association of Agricultural Economists.
  8. Uhrig, S.C. Noah, 2005. "Cinema is good for you: the effects of cinema attendance on self reported anxiety or depression and 'happiness'," ISER Working Paper Series 2005-14, Institute for Social and Economic Research.
  9. Leonardo Becchetti & Alessandra Pelloni, . "What are we learning from the life satisfaction literature?," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
  10. BARTOLINI Stefano & SARRACINO Francesco, 2011. "Happy for How Long? How Social Capital and GDP relate to Happiness over Time," CEPS/INSTEAD Working Paper Series 2011-60, CEPS/INSTEAD.
  11. repec:hal:wpaper:halshs-00564836 is not listed on IDEAS
  12. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.

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