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Subjective Well-Being and Relative Deprivation: An Empirical Link

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Author Info
Conchita D'Ambrosio
Joachim R. Frick

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Abstract

This paper explores the relationship between two well-established con-cepts of measuring individual well-being: the concept of happiness, i.e. self-reported level of satisfaction with income and life, and relative deprivation/satisfaction, i.e. the gaps between the individual’s income and the incomes of all individuals richer/poorer than him. Operationalizing both concepts using micro panel data from the German Socio-Economic Panel, we provide empirical evidence for subjective well-being depending more on relative satisfaction than on absolute levels of income. This finding holds even after controlling for other influential factors in a multivariate setting.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 449.

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Length: 22 p.
Date of creation: 2004
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Handle: RePEc:diw:diwwpp:dp449

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Related research
Keywords: Relative deprivation; Satisfaction; Subjective well-being; SOEP;

Other versions of this item:

Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bossert, Walter & D'Ambrosio, Conchita & Peragine, Vito, 2004. "Deprivation and Social Exclusion," Cahiers de recherche 02-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ. [Downloadable!]
    Other versions:
  2. Jean-Yves Duclos, 2000. "Gini Indices and the Redistribution of Income," International Tax and Public Finance, Springer, vol. 7(2), pages 141-162, March. [Downloadable!] (restricted)
  3. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September. [Downloadable!] (restricted)
    Other versions:
  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)
    Other versions:
  5. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May. [Downloadable!] (restricted)
  6. Duclos, Jean-Yves & Gregoire, Philippe, 2002. "Absolute and Relative Deprivation and the Measurement of Poverty," Review of Income and Wealth, Blackwell Publishing, vol. 48(4), pages 471-92, December. [Downloadable!] (restricted)
    Other versions:
  7. Kakwani, Nanak, 1984. "The Relative Deprivation Curve and Its Applications," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 384-94, October.
  8. Hamermesh, Daniel S., 1999. "The Changing Distribution of Job Satisfaction," IZA Discussion Papers 42, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. 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)
  10. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May. [Downloadable!] (restricted)
    Other versions:
  11. Kakwani, Nanak, 1984. "The Relative Deprivation Curve and Its Applications: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 400-405, October.
  12. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," NBER Working Papers 10361, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  13. Schwarze, Johannes & Härpfer, Marco, 2003. "Are People Inequality Averse, and Do They Prefer Redistribution by the State? A Revised Version," IZA Discussion Papers 974, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Rosen, Sherwin, 1984. "The Relative Deprivation Curve and Its Applications," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 395-97, October.
  15. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2004. "Using Analysis of Gini (ANoGi) for Detecting Whether Two Sub-Samples Represent the Same Universe: The SOEP Experience," IZA Discussion Papers 1049, Institute for the Study of Labor (IZA). [Downloadable!]
  16. Chakravarty, S. R. & Chakraborty, A. B., 1984. "On indices of relative deprivation," Economics Letters, Elsevier, vol. 14(2-3), pages 283-287. [Downloadable!] (restricted)
  17. Hey, John D & Lambert, Peter J, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 567-73, November.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Shlomo Yitzhaki & Edna Schechtman, 2005. "The properties of the extended Gini measures of variability and inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 401-433. [Downloadable!]
  2. 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!]
  3. Verme Paolo, 2007. "Relative deprivation in the labour space," Department of Economics Working Papers 200701, University of Turin. [Downloadable!]
  4. Pérez Truglia, Ricardo Nicolás, 2007. "Can a rise in income inequality improve welfare?," MPRA Paper 4700, University Library of Munich, Germany, revised 22 Dec 2007. [Downloadable!]
  5. David Dorn & Justina Fischer & Gebhard Kirchgässner & Alfonso Sousa-Poza, 2008. "Direct democracy and life satisfaction revisited: new evidence for Switzerland," Journal of Happiness Studies, Springer, vol. 9(2), pages 227-255, June. [Downloadable!] (restricted)
  6. José M. Labeaga & José Alberto Molina & María Navarro, 2007. "Income Satisfaction and Deprivation in Spain," IZA Discussion Papers 2702, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Claudia Biancotti, 2006. "A Dual-Regime Utility Model for Poverty Analysis," Temi di discussione (Economic working papers) 603, Bank of Italy, Economic Research Department. [Downloadable!]
  8. Christoph Wunder & Johannes Schwarze, 2006. "Income Inequality and Job Satisfaction of Full-Time Employees in Germany," IZA Discussion Papers 2084, Institute for the Study of Labor (IZA). [Downloadable!]
  9. 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)
  10. DAVID DORN & Justina Fischer & GEBHARD KIRCHGÄSSNER & ALFONSO SOUSA-POZA, 2005. "Is It Culture or Democracy? The Impact of Democracy, Income, and Culture on Happiness," University of St. Gallen Department of Economics working paper series 2005 2005-12, Department of Economics, University of St. Gallen. [Downloadable!]
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