Predicting the Trend of Well-Being in Germany: How Much Do Comparisons, Adaptation and Sociability Matter?

Abstract

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. Population et emploi, CEPS/INSTEAD, LuxembourgAbstract Using longitudinal data from the German Socio-Economic Panel, we estimate the variation of subjective well-being experienced by Germans over the last two decades testing the role of some of the major correlates of people's well-being. Our results suggest that the variation of Germans' well-being between 1996 and 2007 is well predicted by changes over time of income, demographics and social capital. The increase in social capital predicts the largest positive change in subjective well-being. Income growth, also predicts a substantial change in subjective well-being, but it is compensated for about three fourths by the joint negative predictions due to income comparison and income adaptation. Finally, we find that aging of the population predicts the largest negative change in subjective well-being. This result appears to hinge on the large loss of satisfaction experienced by individuals in old age.

Testing the tunnel effect: comparison, age and happiness in UK and German panels

“…However, later in life, when everything has been learned, then, ceteris paribus, the higher the current income of their peers, the worse people think they have performed in relative terms, whether this is viewed in terms of just current performance or, looking back over one's life, in terms of lifetime performance. Bartolini et al 2012;Cuesta and Budria 2012;FitzRoy et al 2011aFitzRoy et al , 2011bLayard et al 2010;Senik 2009;Clark et al 2008;Ferrer-i-Carbonell 2005;Luttmer 2005;Blanchflower and Oswald 2004. 2 In FitzRoy et al (2011a, 2011b, while only the 2008 SOEP wave was used, it obtained many qualitatively similar results.…”

“…However, this does not capture the declining happiness of the oldest respondents, as is evident in samples with all ages where either cubic or non-parametric age controls are used (Fischer, 2009;FitzRoy et al 2011aFitzRoy et al , 2011bBartolini et al, 2012, Wunder et al, 2013. Pfaff (2013) uses a quadratic in age and finds negative estimates for age squared until the sample is restricted to workers only, with the estimates then being positive for all three countries.…”

Pay Referents and Satisfaction with Pay: Does Occupational Proximity Matter?

“…We know from social comparison theory that people compare themselves with others who are similar to them in terms of performance (Festinger, 1954) or related attributes (Bartolini, Bilancini and Sarracino, 2013;Clark and Senik, 2010;Danzer et al, 2014;Garcia, Tor and Schiff, 2013;Goodman, 1974;Kulik and Ambrose, 1992). While the above literature has operationalized similarity in several ways, as we will review next, it has yet to probe for patterns of pay comparison as a function of occupational prestige similarity.…”

Poverty and Welfare Measurement on the Basis of Prospect Theory

“…Bartolini et al . () provide evidence on the importance of past income level for individuals' well‐being using well‐known SOEP data from Germany, and Graham et al . (, table ) show the same using data from one of the countries we consider, Russia.…”

“…(), Layard and Nickell (), and Bartolini et al . () suggests that while much adaptation clearly occurs, adaptation is not at all complete. This implies that both the level and the changes of income matter for well‐being.…”