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When Information Dominates Comparison: A Panel Data Analysis Using Russian Subjective Data

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  • Claudia Senik

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Abstract

We propose a micro-econometric investigation into the relation between subjective life satisfaction and income distribution, using a balanced panel survey of the Russian population (RLMS), running from 1994 to 2000, including 4096 individuals. We show that in the context of the Russian very volatile environment, Hirschman’s (1973) “tunnel effect” conjecture seems to be validated : variables reflecting income distribution do not influence satisfaction through social comparisons; individuals rather seem to use their informational content in order to form their expectations. The reference group’s income exerts a positive influence on individual satisfaction, which contrasts with other studies on the subject. Inequality indices do not affect individual welfare.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 495.

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Length: 53 pages
Date of creation: 06 May 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-495

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Keywords: subjective welfare; relative income; inequality; transition; panel data;

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References

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Citations

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Cited by:
  1. Russell Smyth & Ingrid Nielsen & Qingguo Zhai, 2010. "Personal Well-being in Urban China," Social Indicators Research, Springer, vol. 95(2), pages 231-251, January.
  2. Andrew E. Clark, 2012. "Happiness, Habits and High Rank: Comparisons in Economic and Social Life," SOEPpapers on Multidisciplinary Panel Data Research 452, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Eduardo Pérez-Asenjo, 2011. "If happiness is relative, against whom do we compare ourselves? Implications for labour supply," Journal of Population Economics, Springer, vol. 24(4), pages 1411-1442, October.
  4. Paul Frijters & Amy Y.C. Liu & Xin Meng, 2008. "Are optimistic expectations keeping the Chinese happy?," NCER Working Paper Series 37, National Centre for Econometric Research.
  5. Andrew Clark & Andreas Knabe & Steffen Rätzel, 2008. "Boon or Bane?: Others' Unemployment, Well-Being and Job Insecurity," SOEPpapers on Multidisciplinary Panel Data Research 153, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. David G. Blanchflower & Andrew J. Oswald, 2004. "Money, Sex, and Happiness: An Empirical Study," NBER Working Papers 10499, National Bureau of Economic Research, Inc.
  7. Lelkes, Orsolya, 2003. "A pénz boldogít? A jövedelem és hasznosság kapcsolatának empirikus elemzése
    [Can money buy happiness? An empirical analysis of the relation between income and utility]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 383-405.
  8. Akay, Alpaslan & Martinsson, Peter, 2012. "Positional Concerns through the Life Cycle: Evidence from Subjective Well-Being Data and Survey Experiments," IZA Discussion Papers 6342, Institute for the Study of Labor (IZA).

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