Direct evidence for income comparisons and subjective well-being across reference groups

Goerke, Laszlo; Pannenberg, Markus

doi:10.1016/j.econlet.2015.10.012

Cited by 52 publications

(35 citation statements)

References 13 publications

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“…The results show that the unfavorable relative income position has a stronger impact on life satisfaction. The asymmetric effect of income comparisons on life satisfaction is in line with some previous research (e.g., Senik ; Goerke and Pannenberg ) . A possible explanation is that people tend to react more to negative than positive information which has been largely proven in the literature on personality and psychology (e.g., Ito et al ; Ohman, Lundqvist, and Esteves ).…”

Section: Resultssupporting

confidence: 91%

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The Impact of Self‐Perceived Relative Income on Life Satisfaction: Evidence from British Panel Data

Yu¹

2019

Southern Economic Journal

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This is the first article that uses panel data to investigate the impact of individuals' self‐perceived relative income on life satisfaction. Analyses show that the self‐perceived relative income has a significant impact on life satisfaction, but the impact is asymmetric. The decline in life satisfaction is much more significant due to perceiving a lower relative income in comparison to the rise in life satisfaction because of perceiving a higher relative income. Absolute income is only significantly and positively associated with life satisfaction in the pooled ordinary least squares estimations, but the association is never significantly different from zero when individual fixed effects are controlled. Household savings have a positive but small impact on life satisfaction. Among different financial‐related shocks, people's self‐perceived relative income varies the most due to changes in household net income, total savings, and employment status.

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Section: Resultssupporting

confidence: 91%

“…(e.g., Senik 2009;Goerke and Pannenberg 2015). 19 A possible explanation is that people tend to react more to negative than positive information which has been largely proven in the literature on personality and psychology (e.g., Ito et al 1998;Ohman, Lundqvist, and Esteves 2001).…”

Section: Is Income Comparison Symmetric?mentioning

confidence: 99%

The Impact of Self‐Perceived Relative Income on Life Satisfaction: Evidence from British Panel Data

Yu¹

2019

Southern Economic Journal

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“…, Stark andHyll (2011), Card et al (2012), Stark et al (2012), and Goerke and Pannenberg (2015). The evidence overwhelmingly supports the notion of a strong asymmetry: the comparisons that significantly affect an individual's sense of wellbeing are the ones rendered by looking "up" the income hierarchy, whereas looking "down"…”

Section: How Trade Alters Social Space and Why This Change Matters Fsupporting

confidence: 50%

An Adverse Social Welfare Effect of a Doubly Gainful Trade

Stark

Kosiorowski

2018

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. We are indebted to a referee for kind words, intriguing questions, and thoughtful remarks, and to Andrew Foster for advice and guidance. Terms of use: Documents in AbstractAcknowledging individuals' distaste for low relative income renders trade less appealing when trade is viewed as a technology that integrates economies by merging separate social spheres into one. We define a "trembling trade" as a situation in which gains from trade are overtaken by losses of relative income, with the result that global social welfare is reduced. A constructive example reveals that a "trembling trade" can arise even when trade is doubly gainful in that it increases the income of every individual and narrows the income gap between the trading populations.

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“…Finally, we control for population density at the municipality level based on area and population data available from the 2010 census. 8 Some studies adopt personality traits for analysis to control individual heterogeneity (See Powdthavee, 2005;Boyce and Wood, 2011;Fleming, 2011, 2013;Ambrey et al, 2014;Goerke and Pannenberg, 2015).…”

Section: Ii1 Data and Variablesmentioning

confidence: 99%

“…In particular, the characteristics used to identify reference groups vary: studies have used the average income or predicted income of reference groups based on individual characteristics such as age, gender, marital status, number of children, education, occupation, and industry (McBride, 2001;Senik, 2004;Ferrer-i-Carbonell, 2005;Luttmer, 2005;Senik, 2008;Caporale et al, 2009;Oshio et al, 2011;Brown et al, 2015;Goerke and Pannenberg, 2015;Welsch and Kühling, 2015). Additionally, different levels of spatial categories have been employed to construct measures of RI (Kingdon and Knight, 2007;Knies, 2012;Brown et al, 2015).…”

mentioning

confidence: 99%

Relative Income, Community Attachment and Subjective Well–Being: Evidence from Japan

Tsurumi¹,

Imauji²,

Managi³

2018

Kyklos

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Summary Income is one of the most important and well–studied determinants of subjective well–being (SWB), and empirical evidence indicates that there is a robust positive income effect on measures of SWB. However, evidence from previous studies is inconclusive regarding the impact of relative income on reported well–being. In this study, we use original Japanese survey data collected in 2015 and reference area income derived from 500 m mesh data to examine the impact of relative income on life satisfaction. The results of structural equation modeling reveal that relative income has a direct negative impact but an indirect positive effect through community attachment on life satisfaction. This suggests that the negative effects of reference income observed in previous studies that did not consider community attachment are likely to be overestimated. Our results also suggest that younger people are more affected by the direct negative effect of reference income than people in other age groups. Furthermore, people with a household income higher than the reference area income are not necessarily more attached to their neighborhood; however, they are more likely to report higher life satisfaction.

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Direct evidence for income comparisons and subjective well-being across reference groups

Cited by 52 publications

References 13 publications

The Impact of Self‐Perceived Relative Income on Life Satisfaction: Evidence from British Panel Data

The Impact of Self‐Perceived Relative Income on Life Satisfaction: Evidence from British Panel Data

An Adverse Social Welfare Effect of a Doubly Gainful Trade

Relative Income, Community Attachment and Subjective Well–Being: Evidence from Japan

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