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Heterogeneity in reported wel-being: Evidence from twelve European countries

Author

Listed:
  • Andrew E. Clark

    (DELTA - Département et Laboratoire d'Economie Théorique et Appliquée - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, IZA - Institute for the Study of Labor - IZA)

  • Fabrice Etilé

    (CORELA - Laboratoire de Recherche sur la Consommation - INRA - Institut National de la Recherche Agronomique)

  • Fabien Postel-Vinay

    (LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

  • Claudia Senik

    (DELTA - Département et Laboratoire d'Economie Théorique et Appliquée - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, UP4 - Université Paris-Sorbonne)

  • Karine van Der Straeten

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper models the relationship between income and reported well-being using latent class techniques applied to panel data from twelve European countries. Introducing both intercept and slope heterogeneity into this relationship, we strongly reject the hypothesis that individuals transform income into well-being in the same way. We show that both individual characteristics and country of residence are strong predictors of the four classes we identify. We expect that differences in the marginal effect of income on well-being across classes will be reflected in both behaviour and preferences for redistribution.

Suggested Citation

  • Andrew E. Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine van Der Straeten, 2005. "Heterogeneity in reported wel-being: Evidence from twelve European countries," Post-Print halshs-00754095, HAL.
    • Handle: RePEc:hal:journl:halshs-00754095
    DOI: 10.1111/j.0013-0133.2005.00983.x
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    References listed on IDEAS

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    More about this item

    Keywords

    ECONOMIE DU BIEN-ETRE;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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