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Ambition and jealousy. Income interactions in the "Old" Europe versus the "New" Europe and the United States

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Claudia Senik

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Abstract

This paper asks how income distribution affects individual well-being and tries to explore the idea that this relation depends on the degree of mobility and uncertainty in the economy. It mostly concentrates on the relation between satisfaction and reference income (defined as the income of one's professional peers), and hinges on the micro-econometric analysis of household survey data (mostly panel), including subjective attitudinal questions. Using over one million observations, it uncovers a divide, in the perception of income inequality, between "old" -low mobility- European countries on the one hand, and "new" European post-Transition countries and the United States, on the other hand. Whereas "jealousy" is dominant in the former, "ambition" is even stronger in the latter.

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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2005-14.

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Date of creation: May 2005
Date of revision: Mar 2007
Handle: RePEc:pse:psecon:2005-14

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Giacomo Corneo & Hans Peter Gruner, 2000. "Social Limits to Redistribution," American Economic Review, American Economic Association, vol. 90(5), pages 1491-1507, December. [Downloadable!] (restricted)
  2. Claudia Senik, 2003. "What Can we Learn from Subjective Data ? The Case of Income and Well-Being," DELTA Working Papers 2003-06, DELTA (Ecole normale supérieure), revised Oct 2003. [Downloadable!]
  3. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September. [Downloadable!] (restricted)
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  4. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government. [Downloadable!]
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  5. Ravallion, Martin & Lokshin, Michael, 2001. "Identifying Welfare Effects from Subjective Questions," Economica, London School of Economics and Political Science, vol. 68(271), pages 335-57, August. [Downloadable!] (restricted)
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  6. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 551-84, August. [Downloadable!] (restricted)
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  7. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer. [Downloadable!] (restricted)
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  8. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
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  9. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May. [Downloadable!] (restricted)
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  10. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
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  11. Cooper, Ben & Garcia-Penalosa, Cecilia & Funk, Peter, 2001. "Status Effects and Negative Utility Growth," Economic Journal, Royal Economic Society, vol. 111(473), pages 642-65, July. [Downloadable!] (restricted)
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  12. Andrew Caplin & John Leahy, 2001. "Psychological Expected Utility Theory And Anticipatory Feelings," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 55-79, February. [Downloadable!] (restricted)
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  13. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July. [Downloadable!] (restricted)
  14. Claudia Senik, 2004. "Relativizing relative income," DELTA Working Papers 2004-17, DELTA (Ecole normale supérieure). [Downloadable!]
  15. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, vol. 107(445), pages 1832-47, November. [Downloadable!] (restricted)
  16. Alberto Alesina & Eliana La Ferrara, . "Preferences for Redistribution in the Land of Opportunities," Working Papers 178, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
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  17. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December. [Downloadable!] (restricted)
  18. Francesco Daveri & Olmo Silva, . "Not Only Nokia," Working Papers 222, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
  19. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the US Have a European-Style Welfare System?," NBER Working Papers 8524, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, 09. [Downloadable!] (restricted)
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  21. Alberto Alesina & George-Marios Angeletos, 2002. "Fairness and Redistribution: US versus Europe," Harvard Institute of Economic Research Working Papers 1983, Harvard - Institute of Economic Research. [Downloadable!]
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  22. Atkinson, A. B. & Bourguignon, F. & Morrisson, C., 1988. "Earnings mobility," European Economic Review, Elsevier, vol. 32(2-3), pages 619-632, March. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Benno Torgler & Markus Schaffner & Bruno S.Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," School of Economics and Finance Discussion Papers and Working Papers Series 230, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
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  2. Fischer, Justina AV, 2008. "The Welfare Effects of Social Mobility," MPRA Paper 16339, University Library of Munich, Germany, revised Jun 2009. [Downloadable!]
  3. Van Landeghem, Bert & Swinnen, Johan & 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. [Downloadable!]
  4. Georgellis, Yannis & Gregoriou, Andros & Tsitsianis, Nikolaos, 2009. "Reference-dependent preferences in the public and private sectors: A nonlinear perspective," MPRA Paper 17021, University Library of Munich, Germany. [Downloadable!]
  5. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," School of Economics and Finance Discussion Papers and Working Papers Series 234, School of Economics and Finance, Queensland University of Technology, revised 17 Jun 2008. [Downloadable!]
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  6. Claudia Senik, 2007. "Direct Evidence on Income Comparisons and their Welfare Effects," IZA Discussion Papers 3195, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt & Uwe Dulleck, 2008. "Inequality Aversion and Performance in and on the Field," NCER Working Paper Series 36, National Centre for Econometric Research. [Downloadable!]
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  8. Fischer, Justina AV, 2009. "The Welfare Effects of Social Mobility: An Analysis for OECD countries," MPRA Paper 17070, University Library of Munich, Germany. [Downloadable!]
  9. Grosfeld, Irena & Senik, Claudia, 2008. "The Emerging Aversion to Inequality: Evidence from Poland 1992–2005," IZA Discussion Papers 3484, Institute for the Study of Labor (IZA). [Downloadable!]
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