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Subjective Well-Being and Relative Deprivation: An Empirical Link

  • D'Ambrosio, Conchita

    ()

    (University of Luxembourg)

  • Frick, Joachim R.

    (DIW Berlin)

This paper explores the relationship between two well-established concepts of measuring individual well-being: the concept of happiness, i.e. self-reported level of satisfaction with income and life, and relative deprivation/satisfaction, i.e. the gaps between the individual's income and the incomes of all individuals richer/poorer than him. Operationalizing both concepts using micro panel data from the German Socio-Economic Panel (SOEP), we provide empirical evidence for subjective well-being depending more on relative satisfaction than on absolute levels of income. This finding holds even after controlling for other influential factors in a multivariate setting.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1351.

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Length: 24 pages
Date of creation: Oct 2004
Date of revision:
Publication status: published in: Social Indicators Research, 2007, 81(3), 497-519
Handle: RePEc:iza:izadps:dp1351
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  1. Daniel S. Hamermesh, 2001. "The Changing Distribution of Job Satisfaction," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 1-30.
  2. Tsakloglou, Panos & Papadopoulos, Fotis, 2001. "Identifying Population Groups at High Risk of Social Exclusion: Evidence from the ECHP," IZA Discussion Papers 392, Institute for the Study of Labor (IZA).
  3. Chakravarty, S. R. & Chakraborty, A. B., 1984. "On indices of relative deprivation," Economics Letters, Elsevier, vol. 14(2-3), pages 283-287.
  4. Kakwani, Nanak, 1984. "The Relative Deprivation Curve and Its Applications," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 384-94, October.
  5. Kakwani, Nanak, 1984. "The Relative Deprivation Curve and Its Applications: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 400-405, October.
  6. BOSSERT, Walter & D'AMBROSIO, Conchita & PERAGINE, Vito, 2004. "Deprivation and Social Exclusion," Cahiers de recherche 02-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  7. Hey, John D & Lambert, Peter J, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 567-73, November.
  8. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2004. "Using Analysis of Gini (ANoGi) for Detecting Whether Two Sub-Samples Represent the Same Universe: The SOEP Experience," IZA Discussion Papers 1049, Institute for the Study of Labor (IZA).
  9. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  10. Jean-Yves Duclos, 2000. "Gini Indices and the Redistribution of Income," International Tax and Public Finance, Springer, vol. 7(2), pages 141-162, March.
  11. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  12. Duclos, Jean-Yves & Grégoire, Philippe, 1999. "Absolute and Relative Deprivation and the Measurement of Poverty," Cahiers de recherche 9910, Université Laval - Département d'économique.
  13. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," NBER Working Papers 10361, National Bureau of Economic Research, Inc.
  14. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May.
  15. repec:dgr:uvatin:20020024 is not listed on IDEAS
  16. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  17. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  18. Schwarze, Johannes & Härpfer, Marco, 2003. "Are People Inequality Averse, and Do They Prefer Redistribution by the State? A Revised Version," IZA Discussion Papers 974, Institute for the Study of Labor (IZA).
  19. Rosen, Sherwin, 1984. "The Relative Deprivation Curve and Its Applications," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 395-97, October.
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