Reference Dependent Financial Satisfaction over the Course of the Celtic Tiger: A Panel Analysis Utilising the Living in Ireland Survey 1994-2001
AbstractThe link between income and subjective satisfaction with one’s financial situation is explored in this paper using a panel analysis of 4,000 individuals tracked through the course of the ‘Celtic Tiger’ boom period, 1994-2001. The impact of the level of individual and household income, the time-path of income and the impact of reference group income on financial satisfaction are all considered. To the extent that income influences financial satisfaction, there is strong evidence from this paper that household income has a greater effect on financial satisfaction than individual income. There is also evidence that changes in income have an independent effect on financial satisfaction with the time derivative of income entering positively in the financial satisfaction equation. Thus, our paper gives further evidence to support the hypothesis that individuals process changes as well as absolute levels of income. While reference group income has a negative effect at the start of the period it has no effect at the end.
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Bibliographic InfoPaper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number tep200611.
Length: 14 pages
Date of creation: Jun 2006
Date of revision:
Other versions of this item:
- Delaney, Liam & Newman, Carol & Nolan, Brian, 2006. "Reference dependent financial satisfaction over the course of the Celtic Tiger: a panel analysis utilising the Living in Ireland Survey 1994-2 001," Stirling Economics Discussion Papers p200611, University of Stirling, Division of Economics.
- D60 - Microeconomics - - Welfare Economics - - - General
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
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by Martin Ryan in Geary Behaviour Centre on 2011-02-06 21:14:00
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