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Heterogeneity in reported well-being:Evidence from twelve European countries

Author

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  • Andrew E. Clark

    (DELTA - Département et Laboratoire d'Economie Théorique et Appliquée - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Fabrice Etilé

    (CORELA - Laboratoire de Recherche sur la Consommation - INRA - Institut National de la Recherche Agronomique)

  • Fabien Postel-Vinay

    (LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Claudia Senik

    (DELTA - Département et Laboratoire d'Economie Théorique et Appliquée - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, UP4 - Université Paris-Sorbonne)

  • Karine van Der Straeten

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper models the relationship between income and self-reportd weel-being using random-effect techniques applied to panel data from twelve European countries. We cannot distinguish empirically between heterogeneities in the utility function (translating income into utility) and the expression function (turning utility into self-reported well-being), but we strongly reject the hypothesis that individuals carry out these joint transformations in same way. The "marginal well-being effect of income" is very different in the four classes we identify; thus we expect preferences for redistribution and behaviour to be differeent accross these classes. Our results suggest that aggregating data accross diverse populations, and countries, may be a dangerous practice.

Suggested Citation

  • Andrew E. Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine van Der Straeten, 2004. "Heterogeneity in reported well-being:Evidence from twelve European countries," Working Papers hal-00242916, HAL.
    • Handle: RePEc:hal:wpaper:hal-00242916
    Note: View the original document on HAL open archive server: https://hal.science/hal-00242916
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    References listed on IDEAS

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    More about this item

    Keywords

    Income; Utility; Well-being; Heterogeneity; Latent classes; Revenu; Utilité; Bien-être; Hétérogénéité; Classes latentes;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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