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Heterogeneity in reported well-being: evidence from twelve european countries

Author

Listed:
  • Andrew E. Clark
  • Fabrice Etilé
  • Fabien Postel-Vinay
  • Claudia Senik
  • Karine Van der Straeten

Abstract

This paper models the relationship between income and self-reported well-being using random-effect techniques applied to panel data from twelve European countries. We cannot distinguish empirically between heterogeneities in the utility function (translating income into utility) and the expression function (turning utility into self-reported well-being), but we strongly reject the hypothesis that individuals carry out these joint transformations in the same way. The "marginal well-being effect of income" is very different in the four classes we identify; we thus expect preferences for redistribution and behaviour to be different across these classes. Our results suggests that aggregating data across diverse populations, and countries, may be a dangerous practice.

Suggested Citation

  • Andrew E. Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine Van der Straeten, 2004. "Heterogeneity in reported well-being: evidence from twelve european countries," DELTA Working Papers 2004-01, DELTA (Ecole normale supérieure).
    • Handle: RePEc:del:abcdef:2004-01
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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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