Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76197
Authors: 
Schwarze, Johannes
Winkelmann, Rainer
Year of Publication: 
2005
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0503
Abstract: 
Much progress has been made in recent years on developing and applying a direct measure of utility using survey questions on subjective well-being. In this paper we explore whether this new type of measurement can be fruitfully applied to the study of interdependent utility in general, and altruism between parents and adult children who moved away from home in particular. We introduce an appropriate econometric methodology and, using data from the German Socio-Economic Panel for the years 2000-2004, find that the parents' self-reported happiness depends positively on the happiness of their adult children. A one standard deviation move in the child's happiness has the same effect as a 45 percent move in household income.
Subjects: 
Utility function
Extended family
Fixed effects
Ordered probit
JEL: 
D6
D64
C25
J10
Document Type: 
Working Paper

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