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Happiness, habits and high rank: Comparisons in economic and social life

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  • Andrew E. Clark

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, IZA - Institute for the Study of Labor - IZA, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

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 variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00586049.

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Date of creation: Nov 2008
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Handle: RePEc:hal:psewpa:halshs-00586049

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

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References

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  1. Stevenson, Betsey & Wolfers, Justin, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," IZA Discussion Papers 3654, Institute for the Study of Labor (IZA).
  2. AndrewE. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Job Satisfaction and Co-worker Wages: Status or Signal?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 119(536), pages 430-447, 03.
  3. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  4. Conchita D'Ambrosio & Joachim R. Frick, 2007. "Individual Well-Being in a Dynamic Perspective," Discussion Papers of DIW Berlin 673, DIW Berlin, German Institute for Economic Research.
  5. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  6. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  7. 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.
  8. 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).
  9. repec:pse:psecon:2010-43 is not listed on IDEAS
  10. Clark, Andrew E. & Senik, Claudia, 2010. "Will GDP Growth Increase Happiness in Developing Countries?," CEPREMAP Working Papers (Docweb) 1024, CEPREMAP.
  11. Oswald, Andrew J. & Powdthavee, Nattavudh, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA).
  12. 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.
  13. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2008. "Economic satisfaction and income rank in small neighbourhoods," PSE Working Papers halshs-00586254, HAL.
  14. 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.
  15. Bruno S. Frey & Alois Stutzer, 2000. "Maximising Happiness?," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 1(2), pages 145-167, 05.
  16. Claudia Senik, 2002. "When Information Dominates Comparison. A Panel Data Analysis Using Russian Subjective Data," DELTA Working Papers, DELTA (Ecole normale supérieure) 2002-02, DELTA (Ecole normale supérieure).
  17. 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.
  18. 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.
  19. 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.
  20. Andrew E. Clark & Fabrice Etilé, 2010. "Happy house: Spousal weight and individual well-being," PSE Working Papers halshs-00564836, HAL.
  21. repec:pse:psecon:2009-01 is not listed on IDEAS
  22. 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.
  23. 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.
  24. 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).
  25. 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.
  26. KNIGHT, John & SONG, Lina & GUNATILAKA, Ramani, 2009. "Subjective well-being and its determinants in rural China," China Economic Review, Elsevier, vol. 20(4), pages 635-649, December.
  27. 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.
  28. Bruno Frey & Alois Stutzer, 2000. "Happiness Prospers in Democracy," Journal of Happiness Studies, Springer, Springer, vol. 1(1), pages 79-102, March.
  29. 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.
  30. 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.
  31. 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.
  32. 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.
  33. Andrew E. Clark & Orsolya Lelkes, 2009. "Let us pray: religious interactions in life satisfaction," PSE Working Papers halshs-00566120, HAL.
  34. 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).
  35. repec:hal:wpaper:halshs-00566120 is not listed on IDEAS
  36. 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.
  37. 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.
Full references (including those not matched with items on IDEAS)

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. Clark, Andrew E. & Etilé, Fabrice, 2011. "Happy house: Spousal weight and individual well-being," Journal of Health Economics, Elsevier, vol. 30(5), pages 1124-1136.
  2. Leonardo Becchetti & Fabio Pisani, 2012. "Family money, relational life and (class) relative wealth:an empirical analysis on life satisfaction of secondary school students," Econometica Working Papers wp35, Econometica.
  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. repec:ese:iserwp:2005-14 is not listed on IDEAS
  5. 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.
  6. repec:hal:wpaper:halshs-00590436 is not listed on IDEAS
  7. 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.
  8. Becchetti, Leonardo & Pelloni , Alessandra, 2010. "What are we learning from the life satisfaction literature?," AICCON Working Papers, Associazione Italiana per la Cultura della Cooperazione e del Non Profit 76-2010, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
  9. repec:hal:wpaper:halshs-00564836 is not listed on IDEAS
  10. Stefano Bartolini & Francesco Sarracino, 2011. "Happy for How Long? How Social Capital and GDP relate to Happiness over Time," Department of Economics University of Siena, Department of Economics, University of Siena 621, Department of Economics, University of Siena.
  11. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
  12. 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.

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