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The value of reunification in Germany; An analysis of changes in life satisfaction?

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  • Paul Frijters
  • Michael A. Shields
  • John P. Haisken-DeNew

    (School of Economics and Finance, Queensland University of Technology)

Abstract

This paper investigates the patterns and determinants of life satisfaction in Germany following reunification. We implement a new fixed-effect estimator for ordinal life satisfaction in the German Socio-Economic Panel and find negative effects on life satisfaction from being recently fired, losing a spouse through either death or separation and time spent in hospital, whilst we find strong positive effects from income and marriage. Using a new causal decomposition technique, we find that East Germans experienced a continued improvement in life satisfaction to which increased household incomes contributed around 12 percent. Most of the improvement is explained by better average circumstances, such as greater political freedom. For West Germans, we find little change in average life satisfaction over this period

Suggested Citation

  • Paul Frijters & Michael A. Shields & John P. Haisken-DeNew, 2004. "The value of reunification in Germany; An analysis of changes in life satisfaction?," Paul Frijters Discussion Papers 2004-6, School of Economics and Finance, Queensland University of Technology.
  • Handle: RePEc:qut:pfrijt:2004-6
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    File URL: http://www.bus.qut.edu.au/paulfrijters/documents/ShieldsJHRfinalversiongeneralsatisfaction.doc
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Diaz-Serrano, Luis, 2006. "Housing Satisfaction, Homeownership and Housing Mobility: A Panel Data Analysis for Twelve EU Countries," IZA Discussion Papers 2318, Institute for the Study of Labor (IZA).
    2. Mike Shields & Mark Wooden, 2003. "Investigating the Role of Neighbourhood Characteristics in Determining Life Satisfaction," Melbourne Institute Working Paper Series wp2003n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Bruce Headey & Mark Wooden, 2004. "The Effects of Wealth and Income on Subjective Well-Being and Ill-Being," The Economic Record, The Economic Society of Australia, vol. 80(s1), pages 24-33, September.
    4. 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.
    5. Demoussis, Michael & Giannakopoulos, Nicholas, 2008. "Analysis of domain satisfactions: Evidence from a panel of Greek women," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(4), pages 1347-1362, August.
    6. William H. Greene & David A. Hensher, 2008. "Modeling Ordered Choices: A Primer and Recent Developments," Working Papers 08-26, New York University, Leonard N. Stern School of Business, Department of Economics.
    7. Kalyuzhnova, Yelena & Kambhampati, Uma, 2008. "The determinants of individual happiness in Kazakhstan," Economic Systems, Elsevier, vol. 32(3), pages 285-299, September.
    8. Díaz Serrano, Luis, 2008. "Individual Aspirations and Satisfaction:Quantifying the Importance of Homeownership," Working Papers 2072/13268, Universitat Rovira i Virgili, Department of Economics.
    9. Paul Frijters & John P. Haisken-DeNew & Michael Shields, 2003. "Estimating The Causal Effect of Income on Health: Evidence from Post Reunification East Germany," CEPR Discussion Papers 465, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    10. Aekapol Chongvilaivan & Kiyoshi Taniguchi & Rommel Rabanal, 2016. "Impacts of Road Access on Subjective Well-being in Timor-Leste," Asian Economic Journal, East Asian Economic Association, vol. 30(1), pages 91-114, March.
    11. William Greene, 2007. "Discrete Choice Modeling," Working Papers 07-6, New York University, Leonard N. Stern School of Business, Department of Economics.
    12. Ada Ferrer-i-Carbonell, 2002. "Income and Well-being," Tinbergen Institute Discussion Papers 02-019/3, Tinbergen Institute.
    13. Nicoletti, Cheti, 2006. "Differences in job dissatisfaction across Europe," ISER Working Paper Series 2006-42, Institute for Social and Economic Research.

    More about this item

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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