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Direct Evidence for Income Comparisons and Subjective Well-Being across Reference Groups

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  • Laszlo Goerke
  • Markus Pannenberg

Abstract

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.

Suggested Citation

  • Laszlo Goerke & Markus Pannenberg, 2015. "Direct Evidence for Income Comparisons and Subjective Well-Being across Reference Groups," CESifo Working Paper Series 5546, CESifo.
    • Handle: RePEc:ces:ceswps:_5546
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    income comparisons; German Socio-Economic Panel (SOEP); relative income; subjective well-being;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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