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Deprivation and Subjective Well-being: Evidence from Panel Data

Listed author(s):
  • Blázquez, Maite

    ()

    (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)

  • Budría, Santiago

    ()

    (University of Madeira and CEEAplA.)

This paper uses data from the 2000-2008 waves of the German Socio-economic Panel dataset (GSOEP) to provide first estimates of the impact that deprivation in various life domains has on individual well-being. Using a deprivation index proposed by Bossert et al. (2007) and a random effects model extended to include a Mundlak term and explicit controls for the respondents’ personality traits, the paper shows that people care about social comparison information in a number of domains, not just income. Using an equivalent income approach, the paper shows that in terms of well-being a moderate deterioration of the individual position in the income distribution is as important as a 33.5% decrease in own income. This monetary equivalent amounts to an income variation of between 25% and 43% when it comes to other deprivation domains, including durables, accommodation, health and social relations. These results recommend that in the fight against social exclusion (i.e., deprivation in a number of domains), more emphasis should be directed to these non-income despite well-being-relevant dimensions.

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File URL: http://www.uam.es/departamentos/economicas/analecon/especifica/mimeo/wp20118.pdf
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Paper provided by Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History) in its series Working Papers in Economic Theory with number 2011/08.

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Length: 42 pages
Date of creation: Nov 2011
Handle: RePEc:uam:wpaper:201108
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