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What can happiness research tell us about altruism? Evidence from the German Socio-Economic Panel

Author

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  • Johannes Schwarze

    (University of Bamberg)

  • Rainer Winkelmann

    () (Socioeconomic Institute, University of Zurich)

Abstract

Much progress has been made in recent years on developing and applying a direct measure of utility using survey questions on subjective well-being. In this paper we explore whether this new type of measurement can be fruitfully applied to the study of interdependent utility in general, and altruism between parents and adult children who moved away from home in particular. We introduce an appropriate econometric methodology and, using data from the German SocioEconomic Panel for the years 2000-2004, find that the parents� self-reported happiness depends positively on the happiness of their adult children. A one standard deviation move in the child�s happiness has the same effect as a 45 percent move in household income.

Suggested Citation

  • Johannes Schwarze & Rainer Winkelmann, 2005. "What can happiness research tell us about altruism? Evidence from the German Socio-Economic Panel," SOI - Working Papers 0503, Socioeconomic Institute - University of Zurich, revised Sep 2005.
  • Handle: RePEc:soz:wpaper:0503
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    References listed on IDEAS

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    Cited by:

    1. Martin Spieß & Martin Kroh & Rainer Pischner & Gert G. Wagner, 2008. "On the Treatment of Non-Original Sample Members in the German Household Panel Study (SOEP): Tracing, Weighting, and Frequencies," SOEPpapers on Multidisciplinary Panel Data Research 98, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Dennis L. Gärtner, 2010. "Monopolistic screening under learning by doing," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 574-597.
    3. Rainer Winkelmann, 2009. "Unemployment, Social Capital, and Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 10(4), pages 421-430, August.
    4. Stichnoth, Holger, 2009. "The optimal choice of a reference standard for income comparisons: indirect evidence from immigrants' return visits," ZEW Discussion Papers 09-037, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Johannes Schoder & Peter Zweifel, 2008. "Managed Care Konzepte und L�sungsans�tze� Ein internationaler Vergleich aus schweizerischer Sicht," SOI - Working Papers 0801, Socioeconomic Institute - University of Zurich.
    6. Simon Loertscher & Yves Schneider, 2005. "Switching Costs, Firm Size, and Market Structure," SOI - Working Papers 0508, Socioeconomic Institute - University of Zurich.
    7. Inmaculada García & José Molina & María Navarro, 2007. "How Satisfied are Spouses with their Leisure Time? Evidence from Europe," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 546-565, December.
    8. Ana Fernandes, 2011. "Altruism, labor supply and redistributive neutrality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1443-1469, October.
    9. Powdthavee, Nattavudh, 2009. "I can't smile without you: Spousal correlation in life satisfaction," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 675-689, August.
    10. Molina, José Alberto & Navarro Paniagua, Maria & Walker, Ian, 2007. "Mums and Their Sons, Dads and Their Daughters: Panel Data Evidence of Interdependent Marginal Utilities across 14 EU Countries," IZA Discussion Papers 2734, Institute for the Study of Labor (IZA).
    11. Dennis Gaertner, 2007. "Why Bayes Rules: A Note on Bayesian vs. Classical Inference in Regime Switching Models," SOI - Working Papers 0719, Socioeconomic Institute - University of Zurich.
    12. Carlsson, Fredrik & Lampi, Elina & Li, Wanxin & Martinsson, Peter, 2011. "Subjective well-being among preadolescents - Evidence from urban China," Working Papers in Economics 500, University of Gothenburg, Department of Economics.
    13. Adrian Bruhin, 2008. "Stochastic Expected Utility and Prospect Theory in a Horse Race: A Finite Mixture Approach," SOI - Working Papers 0803, Socioeconomic Institute - University of Zurich.
    14. Sandra Hanslin, 2008. "The effect of trade openness on optimal government size under endogenous firm entry," SOI - Working Papers 0802, Socioeconomic Institute - University of Zurich.
    15. Jose Alberto Molina & Maria Navarro & Ian Walker, 2007. "Mums and their sons; Dads and their daughters: Panel Data Evidence of Parental Altruism across 14 EU Countries," Working Papers 200721, Geary Institute, University College Dublin.
    16. Pinar Derin-Güre, 2012. "Happiness and parental altruism in the United States," Applied Economics Letters, Taylor & Francis Journals, vol. 19(10), pages 901-904, July.
    17. Mauricio Cárdenas Santa María & Carolina Mejía & Vincenzo Di Maro, 2008. "Education and life satisfaction: perception or reality?," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 009188, FEDESARROLLO.
    18. Haizhen Mou & Stanley L. Winer, 2012. "Fiscal Incidence when both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home-Care for the Elderly," CESifo Working Paper Series 3731, CESifo Group Munich.
    19. repec:ebl:ecbull:v:4:y:2007:i:10:p:1-5 is not listed on IDEAS

    More about this item

    Keywords

    utility interdependence; sympathy; extended family; fixed effects;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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