When Experienced and Decision Utility Concur: The Case of Income Comparisons

Andrew Clark, Claudia Senik () and Katsunori Yamada ()
Additional contact information
Claudia Senik: Paris School of Economics
Katsunori Yamada: Kindai University

No 9189, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: While there is now something of a consensus in the literature on the economics of happiness that income comparisons to others help determine subjective wellbeing, debate continues over the relative importance of own and reference-group income, in particular in research on the Easterlin paradox. The variety of results in this domain have produced some scepticism regarding happiness analysis, and in particular with respect to the measurement of reference-group income. We here use data from an original Internet survey in Japan to compare the results from happiness regressions to those from hypothetical-choice experiments. The trade-off between own and others' income (showing the importance of absolute and relative income) is similar in these two sets of results. This kind of validation of experienced utility via direct comparison with decision utility remains rare in this literature.

Keywords: reference-group income; income comparisons; satisfaction; discrete-choice experiments (search for similar items in EconPapers)
JEL-codes: D31 D63 I3 J31 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-07
New Economics Papers: this item is included in nep-dcm, nep-hap, nep-lma, nep-ltv and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published - published in: Journal of Behavioral and Experimental Economics, 2017, 70, 1-9

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Related works:
Journal Article: When experienced and decision utility concur: The case of income comparisons (2017)
Working Paper: When experienced and decision utility concur: The case of income comparisons (2017)
Working Paper: When experienced and decision utility concur: The case of income comparisons (2017)
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