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Title:The optimal choice of a reference standard for income comparisons: indirect evidence from immigrants' return visits PDF Logo
Authors:Stichnoth, Holger
Issue Date:2009
Series/Report no.:ZEW Discussion Papers 09-037
Abstract:I propose two new tests of Falk and Knell's (2004)prediction that individuals'reference income increases with ability. To overcome the difficulty that the reference income is not observed in existing large data sets, I extend Falk and Knell's model to establish a link between immigrants' reference income and their return visits to their countries of origin. I derive the (arguably counter-intuitive) predictions that more educated immigrants are less likely to have returned to their country of origin for a visit, and that they are more likely to have difficulty feeling at home when they do return for a visit. Both predictions are confirmed on four waves of data from the German Socio-Economic Panel. The estimated marginal effects are statistically significant, but rather small in size.
Subjects:reference standard
social comparison
immigration
Germany
JEL:D62
D63
H31
Z13
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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