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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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    More about this item

    Keywords

    utility interdependence; sympathy; extended family; fixed effects;
    All these keywords.

    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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