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Reference standards for income comparisons: evidence from immigrants' return visits

  • Holger Stichnoth

    ()

    (ZEW Mannheim)

The present paper shows evidence consistent with Falk and Knell's (2004) prediction that individuals' reference income increases with ability. To overcome the difficulty that the reference income is not observed in most data sets, I use indirect evidence from immigrants return visits to their countries of origin. Falk and Knell's model predicts that more educated immigrants are less likely to have returned to their country of origin for a visit, and that they are more likely to have difficulty feeling at home when they do return for a visit. Both predictions are tested using data from the German Socio-Economic Panel and cannot be rejected.

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File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I4-P255.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 33 (2013)
Issue (Month): 4 ()
Pages: 2707-2717

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Handle: RePEc:ebl:ecbull:eb-13-00557
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  1. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
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  9. Ciro Avitabile & Irma Clots-Figueras & Paolo Masella, 2013. "The Effect of Birthright Citizenship on Parental Integration Outcomes," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 777 - 810.
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  11. Ciro Avitabile & Irma Clots-Figueras & Paolo Masella, 2012. "Citizenship, Fertility and Parental Investment," CSEF Working Papers 305, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  12. Armin Falk & Markus Knell, 2004. "Choosing the Joneses: Endogenous Goals and Reference Standards," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 417-435, October.
  13. Schwarze, Johannes & Harpfer, Marco, 2007. "Are people inequality averse, and do they prefer redistribution by the state?: Evidence from German longitudinal data on life satisfaction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 233-249, April.
  14. Conchita D’Ambrosio & Joachim Frick, 2007. "Income Satisfaction and Relative Deprivation: An Empirical Link," Social Indicators Research, Springer, vol. 81(3), pages 497-519, May.
  15. Anton Suvorov & Jeroen van de Ven, 2008. "Goal Setting as a Self-Regulation Mechanism," Working Papers w0122, Center for Economic and Financial Research (CEFIR).
  16. Alice Hsiaw, 2012. "Goal-Setting and Self-Control," Working Papers 1404, College of the Holy Cross, Department of Economics, revised Aug 2014.
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