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Income comparisons among neighbours and life satisfaction in East and West Germany

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  • Knies, Gundi

Abstract

This paper draws on the German Socio-economic Panel Study (SOEP) to investigate whether changes in others’ income are perceived differently in post-transition and capitalist societies. We find that the neighbourhood income effect for West Germany is negative and slightly more marked in neighbourhoods where the neighbours interact socially. In contrast, the coefficients on neighbourhood income in East Germany are positive, but not statistically significant. This suggests not only that there is a divide between East and West Germany, but also that neighbours may not be a relevant comparison group in societies that have comparatively low levels of neighbouring.

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File URL: https://www.iser.essex.ac.uk/publications/working-papers/iser/2010-11.pdf
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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2010-11.

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Date of creation: 20 Apr 2010
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Publication status: published
Handle: RePEc:ese:iserwp:2010-11

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  6. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(529), pages F222-F243, 06.
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  10. Gundi Knies & Simon Burgess & Carol Propper, 2007. "Keeping up with the Schmidts: An Empirical Test of Relative Deprivation Theory in the Neighbourhood Context," SOEPpapers on Multidisciplinary Panel Data Research 24, DIW Berlin, The German Socio-Economic Panel (SOEP).
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  14. Gundi Knies, 2009. "The Effects of Mobility on Neighbourhood Social Ties," SOEPpapers on Multidisciplinary Panel Data Research 175, DIW Berlin, The German Socio-Economic Panel (SOEP).
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  18. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 24(1), pages 99-119, spring.
  19. Jan Goebel & C. Katharina Spieß & Nils R. J. Witte & Susanne Gerstenberg, 2007. "Die Verknüpfung des SOEP mit MICROM-Indikatoren: Der MICROM-SOEP Datensatz," Data Documentation, DIW Berlin, German Institute for Economic Research 26, DIW Berlin, German Institute for Economic Research.
  20. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, Elsevier, vol. 89(5-6), pages 997-1019, June.
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Cited by:
  1. Holger Stichnoth, 2013. "Reference standards for income comparisons: evidence from immigrants' return visits," Economics Bulletin, AccessEcon, vol. 33(4), pages 2707-2717.
  2. Runli Xie, 2010. "Consumption Growth and Volatility with Consumption Externalities," SFB 649 Discussion Papers, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany SFB649DP2010-057, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

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