Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86635
Authors: 
Praag, Bernard M.S. Van
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper 04-053/3
Abstract: 
In this paper we compare the new satisfaction evaluation approach, developed inthe nineties by Oswald ,Clark , Blanchflower and others with the older incomeevaluation (IEQ) approach, developed by Van Praag and Kapteyn in theseventies of the previous century. We find that both approaches yield strikinglysimilar results with respect to financial satisfaction. The IEQ-approach yieldsadditional insights, but it is not well applicable to other life domains thanfinance. It is argued that the usual Probit specification implies a specificcardinalization and, consequently, is less ordinal than usually thought. It isshown that the Probit-approach may be replaced by three other equivalentspecifications that have some computational and intuitive advantages.
Subjects: 
Financial satisfaction
income evaluation
Probit-models
cardinal utility
JEL: 
C24
C25
D31
H31
I31
I39
Document Type: 
Working Paper

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