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Happiness Functions with Preference Interdependence and Heterogeneity: The Case of Altruism within the Family

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  • Adrian Bruhin

    () (Socioeconomic Institute, University of Zurich)

  • Rainer Winkelmann

    () (Socioeconomic Institute, University of Zurich)

Abstract

This study investigates the prevalence and extent of altruism by examining the relationship between parents' and their adult children's subjective well-being in a data set extracted from the German Socio-Economic Panel. In order to segregate the share of parents with altruistic preferences from those who are selfish, we estimate a finite mixture regression model. We control for various sources of potential bias by taking advantage of the data's panel structure. To validate our modeling approach we show that predicted altruists indeed make higher average transfer payments.

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File URL: http://www.soi.uzh.ch/research/wp/2007/wp0702.pdf
File Function: Revised version, 2008
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Bibliographic Info

Paper provided by University of Zurich, Socioeconomic Institute in its series Working Papers with number 0702.

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Length: 25 pages
Date of creation: Feb 2007
Date of revision: Feb 2008
Publication status: Published in Journal of Population Economics 22, pp. 1063-1080, 2009
Handle: RePEc:soz:wpaper:0702

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Keywords: altruism; subjective well-being; finite mixture regression models;

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  1. Clark, Andrew E. & Etilé, Fabrice & Postel-Vinay, Fabien & Senik, Claudia & Van der Straeten, Karine, 2004. "Heterogeneity in Reported Well-Being: Evidence from Twelve European Countries," IZA Discussion Papers 1339, Institute for the Study of Labor (IZA).
  2. Stefan Boes & Rainer Winkelmann, 2006. "Ordered response models," AStA Advances in Statistical Analysis, Springer, vol. 90(1), pages 167-181, March.
  3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  4. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  5. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
  6. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
  7. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  8. Andrew Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Sénik & Karine Van-Der-Straeten, 2004. "Heterogeneity in reported well-being:Evidence from twelve European countries," Working Papers hal-00242916, HAL.
  9. Phelps, Charlotte D., 2001. "A clue to the paradox of happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 293-300, July.
  10. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
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