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Deprivation and Subjective Well-being: Evidence from Panel Data

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  • Blázquez, Maite

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

  • Budría, Santiago

    () (University of Madeira and CEEAplA.)

Abstract

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.

Suggested Citation

  • Blázquez, Maite & Budría, Santiago, 2011. "Deprivation and Subjective Well-being: Evidence from Panel Data," Working Papers in Economic Theory 2011/08, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  • Handle: RePEc:uam:wpaper:201108
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    Cited by:

    1. Felix FitzRoy & Michael Nolan & Max Steinhardt & David Ulph, 2014. "Testing the tunnel effect: comparison, age and happiness in UK and German panels," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-30, December.

    More about this item

    Keywords

    Subjective well-being; random effects model; social exclusion; deprivation.;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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