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Relative Deprivation, Personal Income Satisfaction, and Average Well-being under Different Income Distributions

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Author Info

  • Seidl, Christian
  • Traub, Stefan
  • Morone, Andrea

Abstract

This paper uses the data gained from an income categorization experiment for five shapes of income distributions to investigate background context effects, relative deprivation, range-frequency theory to explain back- ground context effects, individual income satisfaction versus aggregate well- being, and the dual patterns of income categorization and limen setting. It is shown that background context effects exist and are reflected in relative deprivation. Not all precepts of range-frequency theory can be evidenced. Moreover, we demonstrate a welfare paradox which concerns a contradiction between individual income satisfaction and aggregate well-being. Finally, income categorization and limen setting harbor no response-mode effects, but exhibit conformity. --

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2005/rp2005-04.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2005/04.

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Length: 44 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:unu:wpaper:rp2005-04

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Keywords: relative deprivation; income distributions; income satisfaction; context effects;

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References

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  1. Van Herwaarden, Floor G. & Kapteyn, Arie, 1979. "Empirical comparison of the shape of welfare functions," Economics Letters, Elsevier, vol. 3(1), pages 71-76.
  2. Steven R. Beckman & Buhong Zheng & John P. Formby & W. James Smith, 2002. "Envy, malice and Pareto efficiency: An experimental examination," Social Choice and Welfare, Springer, vol. 19(2), pages 349-367.
  3. Kurt Devooght, 2002. "Measuring Inequality by Counting Complaints: Theory and Empirics," STICERD - Distributional Analysis Research Programme Papers 59, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. Edward L. Glaeser & Bruce Sacerdote, 2000. "The Determinants of Punishment: Deterrence, Incapacitation and Vengeance," NBER Working Papers 7676, National Bureau of Economic Research, Inc.
  5. Seidl, Christian & Camacho Cuena, Eva & Morone, Andrea, 2003. "Income Distributions versus Lotteries Happiness, Response-Mode Effects, and Preference," Economics Working Papers 2003,01, Christian-Albrechts-University of Kiel, Department of Economics.
  6. Donald Green & Karen Jacowitz & Daniel Kahneman & Daniel McFadden, 1995. "Referendum Contingent Valuation, Anchoring, and Willingness to Pay for Public Goods," Working Papers _010, University of California at Berkeley, Econometrics Laboratory Software Archive.
  7. Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 2(3), pages 337-369.
  8. Seidl, Christian, 2002. " Preference Reversal," Journal of Economic Surveys, Wiley Blackwell, vol. 16(5), pages 621-55, December.
  9. Seidl, Christian, 1994. "How sensible is the Leyden individual welfare function of income?," European Economic Review, Elsevier, vol. 38(8), pages 1633-1659, October.
  10. Praag, B.M.S. van & Kapteyn, A.J., 1973. "Further evidence on the individual welfare function of income: An empirical investigation in The Netherlands," Open Access publications from Tilburg University urn:nbn:nl:ui:12-361895, Tilburg University.
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Citations

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Cited by:
  1. Zagórski, K. & Piotrowska, K., 2013. "GINI DP 66: Income Inequality in Nations and Sub- national Regions, Happiness and Economic Attitudes," GINI Discussion Papers 66, AIAS, Amsterdam Institute for Advanced Labour Studies.
  2. Brown, Gordon D. A. & Gardner, Jonathan & Oswald, Andrew J. & Qian, Jing, 2005. "Does Wage Rank Affect Employees' Wellbeing?," IZA Discussion Papers 1505, Institute for the Study of Labor (IZA).
  3. Tim Krieger & Stefan Traub, 2008. "Back to Bismarck? Shifting Preferences for Intragenerational Redistribution in OECD Pension Systems," Working Papers 13, University of Paderborn, CIE Center for International Economics.
  4. Morone, Andrea & Ozdemir, Ozlem, 2012. "Black swan protection: an experimental investigation," MPRA Paper 38842, University Library of Munich, Germany.
  5. Ambra Poggi, 2010. "Within-establishment wage inequality and satisfaction," LABORatorio R. Revelli Working Papers Series 100, LABORatorio R. Revelli, Centre for Employment Studies.
  6. Seidl, Christian & Camacho Cuena, Eva & Morone, Andrea, 2003. "Income Distributions versus Lotteries Happiness, Response-Mode Effects, and Preference," Economics Working Papers 2003,01, Christian-Albrechts-University of Kiel, Department of Economics.
  7. Poggi, Ambra, 2014. "Within-establishment wage inequality and satisfaction," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 8(4), pages 1-21.
  8. Camacho-Cuena, Eva & Seidl, Christian & Morone, Andrea, 2005. "Comparing preference reversal for general lotteries and income distributions," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 682-710, October.

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