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Title:Economic satisfaction and income rank in small neighbourhoods PDF Logo
Authors:Clark, Andrew E.
Kristensen, Nicolai
Westergård-Nielsen, Niels Christian
Issue Date:2008
Series/Report no.:IZA discussion papers 3813
Abstract:We contribute to the literature on well-being and comparisons by appealing to new Danish data dividing the country up into around 9,000 small neighbourhoods. Administrative data provides us with the income of every person in each of these neighbourhoods. This income information is matched to demographic and economic satisfaction variables from eight years of Danish ECHP data. Panel regression analysis shows that, conditional on own household income, respondents report higher satisfaction levels when their neighbours are richer. However, individuals are rank-sensitive: conditional on own income and neighbourhood median income, respondents are more satisfied as their percentile neighbourhood ranking improves. A ten percentage point rise in rank (i.e. from 40th to 20th position in a 200-household cell) is worth 0.11 on a one to six scale, which is a large marginal effect in satisfaction terms.
Subjects:Satisfaction
neighbours
income comparisons
geo-coded data
JEL:C23
Persistent Identifier of the first edition:urn:nbn:de:101:1-20081127345
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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