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Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?

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  • BARTOLINI Stefano
  • BILANCINI Ennio
  • SARRACINO Francesco

Abstract

Using longitudinal data on households living in Germany, we quantify what part of the change in subjective well-being observed over the last two decades is predicted by changes in variables which typically show strong cross-sectional correlation with subjective well-being. We especially focus on absolute income, income comparisons, income adaptation, and sociability, ?nding that all have some predictive power. The increase in sociability indicators predicts the largest positive change in subjective well-being. Absolute income, income comparisons and income adaptation also predict substantial changes in subjective well-being, if taken separately. However, if considered together their net prediction is quite small: the positive change predicted by income growth is compensated for about three fourths by the joint negative predictions due to income comparison and income adaptation. Finally, we ?nd that aging of the population predicts the largest negative change in subjective well-being. This result appears to hinge on the large loss of satisfaction experienced by individuals in old age.

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Paper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2010-07.

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Length: 44 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:irs:cepswp:2010-07

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Keywords: Subjective well-being; Life satisfaction; Social capital; Sociability; Relational goods; Relative income; Social comparisons; Income adaptation;

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Cited by:
  1. FitzRoy, Felix & Nolan, Michael A. & Steinhardt, Max & Ulph, David, 2013. "Testing the Tunnel Effect: Comparison, Age and Happiness in UK and German Panels," IZA Discussion Papers 7452, Institute for the Study of Labor (IZA).
  2. Francesco Sarracino, 2012. "Money, Sociability and Happiness: Are Developed Countries Doomed to Social Erosion and Unhappiness?," Social Indicators Research, Springer, Springer, vol. 109(2), pages 135-188, November.
  3. Francesco Sarracino, 2014. "Richer in Money, Poorer in Relationships and Unhappy? Time Series Comparisons of Social Capital and Well-Being in Luxembourg," Social Indicators Research, Springer, Springer, vol. 115(2), pages 561-622, January.
  4. Jirí Vecerník & Martina Mysíková, 2014. "(Un)happy transition? Subjective Well-being in European Countries in 1991-2008 and Beyond," WIFO Working Papers, WIFO 467, WIFO.
  5. Stefano Bartolini & Ennio Bilancini, 2010. "If not only GDP, what else? Using relational goods to predict the trends of subjective well-being," International Review of Economics, Springer, Springer, vol. 57(2), pages 199-213, June.
  6. Jantti, Markus & Kanbur, Ravi & Nyyssola, Milla & Pirttila, Jukka, 2013. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Working Papers, Cornell University, Department of Applied Economics and Management 180093, Cornell University, Department of Applied Economics and Management.
  7. Beja Jr., Edsel, 2014. "Income growth and happiness: Reassessment of the Easterlin Paradox," MPRA Paper 53360, University Library of Munich, Germany.
  8. Ennio Bilancini & Simone D'Alessandro, 2011. "Long-run Welfare under Externalities in Consumption, Leisure, and Production: A Case for Happy Degrowth vs. Unhappy Growth," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 072, University of Modena and Reggio E., Dept. of Economics.
  9. BARTOLINI Stefano & MIKUCKA Malgorzata & SARRACINO Francesco, 2012. "Money, Trust and Happiness in Transition Countries: Evidence from Time Series," CEPS/INSTEAD Working Paper Series, CEPS/INSTEAD 2012-04, CEPS/INSTEAD.
  10. Bartolini, Stefano & Sarracino, Francesco, 2014. "The dark side of Chinese growth: Explaining decreasing well-being in times of economic boom," MPRA Paper 57765, University Library of Munich, Germany.

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