Direct Evidence on Income Comparisons and Subjective Well-Being

Goerke, Laszlo; Pannenberg, Markus

doi:10.2139/ssrn.2253840

Cited by 14 publications

(23 citation statements)

References 18 publications

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“…1 One alternative to researcher-defined reference-group income is to exploit instead respondent-supplied measures of reference-group income: Mayraz et al (2009), de la Garza et al (2010, and Goerke and Pannenberg (2013) all use such subjective information on cardinal referencegroup income and conclude that income comparisons do indeed affect reported satisfaction.…”

Section: Introductionmentioning

confidence: 99%

When experienced and decision utility concur: The case of income comparisons

Clark

Senik

Yamada

2017

Journal of Behavioral and Experimental Economics

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Section: Introductionmentioning

confidence: 99%

When experienced and decision utility concur: The case of income comparisons

Clark

Senik

Yamada

2017

Journal of Behavioral and Experimental Economics

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“…Another branch of studies relies on direct evidence from survey data. This research for example identified colleagues (Clark and Senik, 2010, with European data), people in your occupation (Goerke and Pannenberg, 2013, with German data) and friends (Yamada and Sato, 2013, with Japanese data) as the most relevant ref-…”

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confidence: 99%

Income Comparisons, Income Adaptation, and Life Satisfaction: How Robust are Estimates from Survey Data?

Pfaff

2013

SSRN Journal

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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. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. AbstractTheory suggests that subjective well-being is affected by income comparisons and adaptation to income.Empirical tests of the effects often rely on self-constructed measures from survey data. This paper shows that results can be highly sensitive to simple parameter changes. Using large-scale panel data from Germany and the UK, I report cases where plausible variations in the underlying income type substantially affect tests of the relationship between life satisfaction, income rank, reference income, and income adaptation. Models simultaneously controlling for income and income rank as well as models with a number of income lags are prone to imperfect multicollinearity with consequences for the precision and robustness of estimates. When testing relative-income effects, researchers should be aware that reference income constructed as average of a rather arbitrarily defined reference group and reference income predicted from Mincer-type earnings equations are two approaches that can produce inconsistent results, and that are probably n...

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“…However, some data contain more explicit information on a respondent's "true" reference group. For example, Goerke and Pannenberg (2013) use data from three pretest modules of the SOEP for the years 2008 to 2010, which include information on participants' perceived relative income position and the comparison intensity for nine reference groups (neighbors, friends, colleagues at the workplace, other people in the respondent's occupation, people in the same age, parents when they were in respondent's age, partner, other women, other men). A theoretical approach in which the reference group is endogenous is given by Falk and Knell (2000).…”

Section: Reference Groupsmentioning

confidence: 99%

Education as a Positional Good? Evidence from the German Socio-Economic Panel

Durst

2021

Soc Indic Res

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People care about their relative standing in society and therefore compare themselves to relevant others. Empirical findings suggest that there are concerns for relative standing for different goods and life domains such as income, cars, attractiveness, and supervisor’s praise. Even education has been mentioned as having a (partially) positional character. However, there has been only small consideration of education as a positional good in the empirical literature so far. Based on the literature on positional concerns and the role of education on relative position, I use German panel data to investigate the relationship between education and life satisfaction beyond the effect education might have through other variables such as income, health, or occupational prestige. Additionally, I consider the possibility that the consumption of education is subject to positional concerns. I discover a positive relationship between education and life satisfaction, indicating that education has a consumption component. Moreover, the relationship depends on the distribution of particular levels of education, suggesting that education has a positional character.

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Direct Evidence on Income Comparisons and Subjective Well-Being

Cited by 14 publications

References 18 publications

When experienced and decision utility concur: The case of income comparisons

When experienced and decision utility concur: The case of income comparisons

Income Comparisons, Income Adaptation, and Life Satisfaction: How Robust are Estimates from Survey Data?

Education as a Positional Good? Evidence from the German Socio-Economic Panel

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