Are Relative-Income Effects Constant Across the Well-Being Distribution?

Budria, Santiago

doi:10.1007/s10902-012-9384-9

Cited by 18 publications

(15 citation statements)

References 55 publications

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“…Typical determinants of subjective wellbeing (income, social life and health) vary over the subjective wellbeing distribution as well, and all are less strongly associated with subjective wellbeing for the happiest quantiles (with considerable heterogeneity also between explanatory variables: for example, the social life variable was still positively associated with subjective wellbeing for the happiest individuals, while income was not; see Binder and Coad , p. 285). In different studies, a positive association (on average) between volunteering and subjective wellbeing turned out to be driven solely by the association found for the unhappiest individuals in the subjective wellbeing distribution (Binder and Freytag ); a similar finding appears to be the case for negative effects of relative income comparisons (Budria ). It can be conjectured that unemployment will also have a heterogeneous impact over the wellbeing distribution.…”

Section: Literature Backgroundmentioning

confidence: 91%

“…As has been argued in Binder and Coad (), such a focus neglects important information about the extremes of the subjective wellbeing distribution: especially in heterogeneous distributions, regression methodologies that focus on means might seriously underestimate or overestimate effects, or even fail to identify effects at all (Cade and Noon ). Quantile regressions have only recently been introduced to subjective wellbeing research (Binder and Coad ; Binder and Freytag ; see also Budria ) and provide evidence for considerable heterogeneity over the conditional wellbeing distribution (that is, conditional on the independent variables). As discussed in the Introduction, this heterogeneity can account for the absence of an (average) association typically found between education and subjective wellbeing.…”

Section: Literature Backgroundmentioning

confidence: 99%

“…In sum, for individuals scoring high in their respective wellbeing scores, wellbeing can be conjectured to act as a shield when they get unemployed (Budria () also finds that individuals high in wellbeing are not negatively affected by relative income comparisons). We hypothesize that for a small subset of happy individuals, unemployment seems to provide an opportunity to improve in certain life domains, for example by having more time to spend on personal relations, avoiding stress, and generally ‘putting one's house in order’.…”

Section: Empirical Analysismentioning

confidence: 99%

“…As such, our paper connects to other approaches that explore the heterogeneity of subjective wellbeing and its determinants, for example by looking into heterogeneous effects of unemployment (Gielen and van Ours ), different domain satisfactions (van Praag et al . ), relative income effects over the wellbeing distribution (Budria ), and different concepts of wellbeing (Knabe et al . ; Krueger and Mueller ), as well as differences in effects based on personality differences (Boyce et al .…”

Section: Introductionmentioning

confidence: 99%

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Heterogeneity in the Relationship Between Unemployment and Subjective Wellbeing: A Quantile Approach

Binder

Coad

2015

Economica

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. that, over the quantiles of our subjective well-being variable, individuals with high well-being suffer less from becoming unemployed. A similar but stronger effect of unemployment is found for a broad mental well-being variable (GHQ-12). For happy and mentally stable individuals, it seems their higher well-being acts like a safety net when they become unemployed. We explore these findings by examining the heterogeneous unemployment effects over the quantiles of satisfaction with various life domains. Terms of use: Documents in EconStor may Keywords INTRODUCTIONBecoming unemployed is a harrowing life experience for many people. For one, becoming unemployed often means losing one's primary source of income (which might be only incompletely replaced by unemployment benefits, if at all). But becoming unemployed also has nonmonetary, psychological costs (e.g., Layard et al., 2012), which include one's potential loss of meaning in life, impairment of personal identity and the loss of self-esteem one draws from one's job. There may also be social stigma, arising from being unemployed in a society where the norm is to work for one's living. These negative effects can be compounded by the loss of social life and contacts one enjoyed at the work place. Taking these factors together, it is hardly surprising to note that unemployment is one of the main drivers of unhappiness in modern societies.Given its importance for human well-being, the effect of unemployment on the subjective well-being of the unemployed has been well-researched. From the early contributions of Clark and Oswald (1994) and Winkelmann and Winkelmann (1998) onwards, unemployment has been shown to consistently and strongly depress subjective well-being. Causality here runs mainly from unemployment to subjective well-being, as research with panel data has shown (Winkelmann and Winkelmann, 1998;Lucas et al., 2004): selection effects, viz. the unhappy being more likely to self-select into unemployment, cannot explain the association between unemployment and subjective well-being (while causality might run in both directions, the stronger effects are from unemployment to subjective well-being). Nevertheless, some questions remain.The present paper explores an issue that has so far been neglected in the literature.Research into subjective well-being mostly focuses on the average effect of life events on subjective well-being by employing multivariate regressions that focus on the conditional mean of th...

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Section: Literature Backgroundmentioning

confidence: 91%

Section: Literature Backgroundmentioning

confidence: 99%

Section: Empirical Analysismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Heterogeneity in the Relationship Between Unemployment and Subjective Wellbeing: A Quantile Approach

Binder

Coad

2015

Economica

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“…The economic literature incorporating personality as a source of individual heterogeneity for well‐being is relatively new. Work by Binder and Coad (), Clark et al (), and Budria () revealed differential effects across the well‐being distribution, but offered little insight on why it exists. But other studies showed that personality affects subjective well‐being (Headey ; Myers and Diener ; Rammstedt ; Steel, Schmidt, and Shultz ), and a number of studies have looked at how personality affects coping with diverse life events such as unemployment (Boyce, Wood, and Brown ), income changes (Boyce and Wood ; Budria and Ferrer‐i‐Carbonell ; Soto and Luhmann ), marriage, childbirth and widowhood (Yap, Anusic, and Lucas ), illness (Kesavayuth, Rosenman, and Zikos ), and disability (Boyce and Wood ).…”

Section: Introductionmentioning

confidence: 99%

Retirement, Personality, and Well‐being

2015

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This study investigates how two sources of individual heterogeneity-personality and gender-impact the well-being effects of retirement. Using data on older men and women from the British Household Panel Survey and its continuation, Understanding Society, we estimate the causal effect of retirement on satisfaction with overall life and domains of life in the presence of personality characteristics. As retirement is often considered to be a choice and thus may be endogenous to individual-level characteristics, we use the eligibility ages for basic state pension in the United Kingdom as instruments for retirement. We find that retirement increases leisure satisfaction of both males and females but not necessarily life satisfaction and income satisfaction. We further show that certain personality characteristics affect the well-being of female retirees. For males, however, personality does not seem to matter in how they cope with retirement. (JEL I31, J26, A12, C23)

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The Relationship Between the Gender Gap in Subjective Well-Being and Leisure Activities in China

Zhou

Peng

2017

J Happiness Stud

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Are Relative-Income Effects Constant Across the Well-Being Distribution?

Cited by 18 publications

References 55 publications

Heterogeneity in the Relationship Between Unemployment and Subjective Wellbeing: A Quantile Approach

Heterogeneity in the Relationship Between Unemployment and Subjective Wellbeing: A Quantile Approach

Retirement, Personality, and Well‐being

The Relationship Between the Gender Gap in Subjective Well-Being and Leisure Activities in China

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