The marginal utility of income

Layard, Richard; Mayraz, Guy; Nickell, Stephen

doi:10.1016/j.jpubeco.2008.01.007

Cited by 440 publications

(300 citation statements)

References 21 publications

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“…Income growth is accompanied by an increase in subjective wellbeing, but only until a certain point. From then on, income grows further while wellbeing stagnates [71][72][73].…”

Section: Wealth Generationmentioning

confidence: 99%

From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway

2016

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Economic activities play a key role in human societies by providing goods and services through production, distribution, and exchange. At the same time, economic activities through common focus on short-term profitability may cause global crisis at all levels. The inclusion of three dimensions-environment, economy, and society-when measuring progress towards sustainable development has accordingly reached consensus. In this context, the Life cycle sustainability assessment (LCSA) framework has been developed for assessing the sustainability performance of products through Life cycle assessment (LCA), Life cycle costing (LCC), and Social life cycle assessment (SLCA). Yet, the focus of common economic assessments, by means of LCC, is still on financial costs. However, as economic activities may have a wide range of positive and negative consequences, it seems particularly important to extend the scope of economic assessments. Foremost, as the limitation to monetary values triggers inconsistent implementation practice. Further aspects like missing assessment targets, uncertainty, common goods, or even missing ownership remain unconsidered. Therefore, we propose economic life cycle assessment (EcLCA) for representing the economic pillar within the LCSA framework, following the requirements of ISO 14044, and introducing an economic impact pathway including midpoint and endpoint categories towards defined areas of protection (AoPs). We identify important target ratios by means of economic AoPs, which drive economic activities on the macro-and microeconomic level. Furthermore, we provide suggestions for midpoint and endpoint indicators representing the defined categories. With the presented EcLCA framework, a first step towards the inclusion of economic impacts within LCSA has been made. Relations between economic activities and resulting consequences are displayed, going beyond the cost-driven view of classical LCC. Further research and fine-tuning of the identified midpoint and endpoint categories and related indicators is, however, needed to enable a valid and consistent assessment basis for fostering the practical implementation of EcLCA and LCSA.

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“…Income growth is accompanied by an increase in subjective wellbeing, but only until a certain point. From then on, income grows further while wellbeing stagnates [71][72][73].…”

Section: Wealth Generationmentioning

confidence: 99%

From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway

2016

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“…The exploration of how income relates to life satisfaction has been a mainstream research endeavor in economic psychology for several decades (e.g., Boyce, Brown, & Moore, 2010;Diener & Biswas-Diener, 2002;Di Tella, Haisken-De New, & MacCulloch, 2010;Easterlin, 1973;Ferrer-i-Carbonell & Frijters, 2004;Kahneman & Deaton, 2010;Layard, Mayraz, & Nickell, 2008;Stevenson & Wolfers, 2008) with the overall conclusion that income is a small but very robust predictor of life satisfaction (Lucas & Dyrenforth, 2006). Until recently researchers examined the relationship between changes in income and changes in life satisfaction Running Head: INDIVIDUAL DIFFERENCES IN LOSS AVERSION 6 without taking into account that income changes represent both increases and decreases (e.g., Ferrer-i-Carbonell & Frijters, 2004;Layard et al, 2008). Thus the robust correlation between changes in income and changes in life satisfaction has commonly been interpreted as representing the effect of increasing income on well-being.…”

Section: Running Head: Individual Differences In Loss Aversionmentioning

confidence: 99%

Individual Differences in Loss Aversion

Boyce

Wood

Ferguson

2016

Pers Soc Psychol Bull

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Loss aversion is considered a general pervasive bias occurring regardless of context or person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample (N = 105,558: replicated in a British sample, N = 33,848), with conscientiousness measured at baseline, those high on conscientiousness have the strongest reactions to income losses, suggesting a pronounced loss aversion effect, whilst for those moderately un-conscientious there is no loss aversion effect. Our research; (a) provides the first evidence of personality moderation of any loss aversion phenomena; (b) supports contextual perspectives that both personality and situational factors need to be examined in combination; (c) shows that the small but robust relationship with life satisfaction is primarily driven by a subset of people experiencing highly impactful losses.

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“…See e.g. Clark and Oswald (1994), Frey and Stutzer (2000), Frijters (2000), Di Tella et al (2001), Easterlin (2001), McBride (2001), Ravallion and Lokshin (2001), Ferrer-i-Carbonell (2005), van Praag (2007), and Layard et al (2008) for further references and discussions. positive but small.…”

Section: Introductionmentioning

confidence: 99%

Retirement and Subjective Well-Being

Bonsang

Klein

2011

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. www.econstor.eu We provide an explanation for the common finding that the effect of retirement on life satisfaction is negligible. For this we use subjective well-being measures for life and domains of life satisfaction that are available in the German Socio-Economic Panel (GSOEP) and show that the effect of voluntary retirement on satisfaction with current household income is negative, while the effect on satisfaction with leisure is positive. At the same time, the effect on health satisfaction is positive but small. Following the life domain approach we then argue that these effects offset each other for an average individual and that therefore the overall effect is negligible. Furthermore, we show that it is important to distinguish between voluntary and involuntary retirement. The effect of involuntary retirement is negative because the adverse effect on satisfaction with household income is bigger, the favorable effect on satisfaction with leisure is smaller, and the effect on satisfaction with health is not significantly different from zero. These results turn out to be robust to using different identification strategies such as fixed effects and first differences estimation, as well as instrumental variables estimation using eligibility ages and plant closures as instruments for voluntary and involuntary retirement. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: J26, J14

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The marginal utility of income

Cited by 440 publications

References 21 publications

From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway

From Life Cycle Costing to Economic Life Cycle Assessment—Introducing an Economic Impact Pathway

Individual Differences in Loss Aversion

Retirement and Subjective Well-Being

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