Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180891 
Authors: 
Year of Publication: 
2018
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 12 [Issue:] 2018-43 [Publisher:] Kiel Institute for the World Economy (IfW) [Place:] Kiel [Year:] 2018 [Pages:] 1-23
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Despite rising popularity of subjective well-being (SWB) as a proxy for utility, its relationship with income is still unresolved. Against the background of debates around the 'Easterlin paradox', this paper seeks a compromise between two positions: one that insists on individual relative income, and one that finds similarity between individual and aggregate levels. Proposing a model which puts the emphasis on the interaction between individual and aggregate-level factors, it argues that the effect of relative income on SWB varies across countries as a function of average income, in addition to a relatively small direct effect of the latter, in partial agreement with the two major positions. The model is tested crosssectionally on the data from the latest wave of World Values Survey. The results from hierarchical mixed-effect models confirm the main argument. But further examination reveals that there is still unaccounted variation especially in middle-income economies.
Subjects: 
subjective well-being
Easterlin paradox
relative income
national income
JEL: 
D31
C31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size
611.46 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.