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Individual Well-Being in a Dynamic Perspective

  • D'Ambrosio, Conchita

    ()

    (University of Luxembourg)

  • Frick, Joachim R.

    (DIW Berlin)

This paper explores the determinants of individual well-being as measured by self-reported levels of satisfaction with income. Making full use of the panel data nature of the German Socio-Economic Panel, we provide empirical evidence for well-being depending on absolute and on relative levels of income in a dynamic framework. This finding holds after controlling for other influential factors in a multivariate setting. The main novelty of the paper is the consideration of dynamic aspects: individual’s own history as well as the relative income performance with respect to the others living in the society under analysis do play a major role in the assessment of well-being.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2618.

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Length: 24 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2618
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