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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. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  2. 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).
  3. 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.
  4. Clark, Andrew E. & Senik, Claudia, 2009. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," CEPREMAP Working Papers (Docweb) 0907, CEPREMAP.
  5. 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.
  6. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
  7. 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).
  8. 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.
  9. 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).
  10. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," SOEPpapers on Multidisciplinary Panel Data Research 84, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2001. "How Much Do We Care About Absolute Versus Relative Income and Consumption?," Working Papers in Economics 63, University of Gothenburg, Department of Economics.
  12. repec:hal:wpaper:halshs-00566120 is not listed on IDEAS
  13. 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.
  14. Powdthavee, Nattavudh, 2009. "Ill-health as a household norm: Evidence from other people's health problems," Social Science & Medicine, Elsevier, vol. 68(2), pages 251-259, January.
  15. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  16. Charness, Gary & Rabin, Matthew, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  17. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2007. "Job satisfaction and co-worker wages: Status or signal?," PSE Working Papers halshs-00587878, HAL.
  18. 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.
  19. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
  20. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2008. "Economic satisfaction and income rank in small neighbourhoods," PSE Working Papers halshs-00586254, HAL.
  21. repec:pse:psecon:2010-43 is not listed on IDEAS
  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 20362, University of Munich, Department of Economics.
  23. 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.
  24. Bruno S. Frey & Alois Stutzer, . "Maximising Happiness?," IEW - Working Papers 022, Institute for Empirical Research in Economics - University of Zurich.
  25. 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.
  26. 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.
  27. 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.
  28. Rafael Di Tella & John Haisken-De New & Robert MacCulloch, 2007. "Happiness Adaptation to Income and to Status in an Individual Panel," NBER Working Papers 13159, National Bureau of Economic Research, Inc.
  29. Bruno Frey & Alois Stutzer, 2000. "Happiness Prospers in Democracy," Journal of Happiness Studies, Springer, vol. 1(1), pages 79-102, March.
  30. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, vol. 112(479), pages 362-383, April.
  31. repec:pse:psecon:2009-01 is not listed on IDEAS
  32. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
  33. 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.
  34. 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.
  35. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  36. Andrew E. Clark & Orsolya Lelkes, 2009. "Let us pray: religious interactions in life satisfaction," PSE Working Papers halshs-00566120, HAL.
  37. 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.
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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
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Cited by:
  1. 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.
  2. Andrew E. Clark & Fabrice Etilé, 2010. "Happy house: Spousal weight and individual well-being," PSE Working Papers halshs-00564836, HAL.
  3. 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 101-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
  4. repec:hal:wpaper:halshs-00564836 is not listed on IDEAS
  5. 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.
  6. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
  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 44375, European Association of Agricultural Economists.
  8. 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 10/11, HEDG, c/o Department of Economics, University of York.
  9. repec:ese:iserwp:2005-14 is not listed on IDEAS

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