Income Satisfaction Inequality and Its Causes
In this paper, the concept of Income Satisfaction Inequality is operationalized on the basis of individual responses to an Income Satisfaction question posed in the German Socio-Economic Panel (GSOEP). Income satisfaction is the subjective analogue of the objective income concept and includes objective income inequality as a special case. The paper introduces a method to decompose Income Satisfaction Inequality according to the contributions from variables such as income, education, and the number of children. Given the panel structure of the data, inequality may be attributed partly to permanent individual circumstances and partly to transitory changes. The paper shows that by far the largest part of the satisfaction inequality has to be ascribed to unobserved heterogeneity. Distinguishing between a structural and an unexplained part of inequality we find that income explains the largest part of structural Income Satisfaction Inequality together with household membership; for non-working individuals, the age distribution is very relevant as well.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.diw.de/en
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Van Praag, Bernard M.S., 1977. "The perception of welfare inequality," European Economic Review, Elsevier, vol. 10(2), pages 189-207.
- Hunt, Jennifer, 2000.
"Why Do People Still Live in East Germany?,"
IZA Discussion Papers
123, Institute for the Study of Labor (IZA).
- Jennifer Hunt, 2000. "Why Do People Still Live in East Germany?," NBER Working Papers 7564, National Bureau of Economic Research, Inc.
- Jennifer Hunt, 2000. "Why Do People Still Live in East Germany?," Discussion Papers of DIW Berlin 201, DIW Berlin, German Institute for Economic Research.
- Hunt, Jennifer, 2000. "Why Do People Still Live In East Germany?," CEPR Discussion Papers 2431, C.E.P.R. Discussion Papers.
- Frank Cowell, 1998.
"Measurement of inequality,"
LSE Research Online Documents on Economics
2084, London School of Economics and Political Science, LSE Library.
- Amartya Sen, 1999. "The Possibility of Social Choice," American Economic Review, American Economic Association, vol. 89(3), pages 349-378, June.
- Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
- Bruno S. Frey & Alois Stutzer, 2000.
"Happiness, Economy and Institutions,"
CESifo Working Paper Series
246, CESifo Group Munich.
- Lillard, Lee A & Willis, Robert J, 1978.
"Dynamic Aspects of Earning Mobility,"
Econometric Society, vol. 46(5), pages 985-1012, September.
- Andrew E. Clark and Andrew J. Oswald, .
"Satisfaction and Comparison Income,"
Economics Discussion Papers
419, University of Essex, Department of Economics.
- Hunt, Jennifer, 1999.
"Determinants of Non-Employment and Unemployment Durations in East Germany,"
CEPR Discussion Papers
2182, C.E.P.R. Discussion Papers.
- Jennifer Hunt, 1999. "Determinants of Non-employment and Unemployment Durations in East Germany," NBER Working Papers 7128, National Bureau of Economic Research, Inc.
- Frijters, Paul, 2000. "Do individuals try to maximize general satisfaction?," Journal of Economic Psychology, Elsevier, vol. 21(3), pages 281-304, June.
- Van Praag, Bernard, 1971.
"The welfare function of income in Belgium: An empirical investigation,"
European Economic Review,
Elsevier, vol. 2(3), pages 337-369.
- Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
- Theil, Henri, 1979. "The measurement of inequality by components of income," Economics Letters, Elsevier, vol. 2(2), pages 197-199.
- Yew-Kwang, Ng, 1997.
"A case for Happiness, Cardinalism, and Interpersonal Comparability,"
Departmental Working Papers
_081, Chinese University of Hong Kong, Department of Economics.
- Ng, Yew-Kwang, 1997. "A Case for Happiness, Cardinalism, and Interpersonal Comparability," Economic Journal, Royal Economic Society, vol. 107(445), pages 1848-58, November.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Markus Pannenberg, 1997. "Documentation of Sample Sizes and Panel Attrition in the German Socio Economic Panel (GSOEP) (1984 until 1996)," Discussion Papers of DIW Berlin 150, DIW Berlin, German Institute for Economic Research.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001.
"Preferences over inflation and unemployment: Evidence from surveys of happiness,"
ZEI Working Papers
B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
- Richard A. Easterlin, 2000. "The Worldwide Standard of Living since 1800," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 7-26, Winter.
- Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
- Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp367. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.