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Can the Large Swings in Russian Life Satisfaction be Explained by Ups and Downs in Real Incomes?

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  • Paul Frijters
  • Ingo Geishecker
  • John P. Haisken‐DeNew
  • Michael A. Shields

Abstract

Russians reported large changes in their life satisfaction over the post‐transition years. In this paper, we explore the factors that drove these changes, focusing on exogenous income changes, using panel data from the Russian Longitudinal Monitoring Survey over the period 1995 to 2001 and implementing a recently developed ordinal fixed‐effects estimator. We apply a causal decomposition technique that allows for bias arising from panel attrition when establishing aggregate trends in life satisfaction. Changes in real household incomes explained 10% of the total change in reported life satisfaction between 1996 and 2000, but up to 30% of some year‐on‐year changes.

Suggested Citation

  • Paul Frijters & Ingo Geishecker & John P. Haisken‐DeNew & Michael A. Shields, 2006. "Can the Large Swings in Russian Life Satisfaction be Explained by Ups and Downs in Real Incomes?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(3), pages 433-458, October.
    • Handle: RePEc:bla:scandj:v:108:y:2006:i:3:p:433-458
    DOI: 10.1111/j.1467-9442.2006.00459.x
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    References listed on IDEAS

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    1. Evgeny Gavrilenkov & Mr. Vincent Koen, 1994. "How Large Was the the Output Collapse in Russia? Alternative Estimates and Welfare Implications," IMF Working Papers 1994/154, International Monetary Fund.
    2. Liliana Winkelmann & Rainer Winkelmann, 1998. "Why Are the Unemployed So Unhappy?Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
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