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Individual Wellbeing in a Dynamic Perspective

  • Conchita D'Ambrosio
  • Joachim R. Frick

This paper explores the determinants of individual well-being as measured by self-reported levels of satisfaction with income. Making full use of the panel data nature of the German Socio-Economic Panel, we provide empirical evidence for well-being depending on absolute and on relative levels of income in a dynamic framework. This finding holds after controlling for other influential factors in a multivariate setting. The main novelty of the paper is the consideration of dynamic aspects: individual's own history as well as the relative income performance with respect to the others living in the society under analysis do play a major role in the assessment of well-being.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 79 (2012)
Issue (Month): 314 (04)
Pages: 284-302

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Handle: RePEc:bla:econom:v:79:y:2012:i:314:p:284-302
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