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Macroeconomic Preferences by Income and Education Level: Evidence from Subjective Well-Being Data

Heinz Welsch and Jan K¨¹hling ()
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Jan K¨¹hling: Department of Economics, University of Oldenburg 26111 Oldenburg, GERMANY

Authors registered in the RePEc Author Service: Jan Kühling ()

Review of Economics & Finance, 2015, vol. 5, 15-32

Abstract: Using subjective well-being data for more than 91,000 individuals in 30 OECD countries from 1990 to 2008, we study how people¡¯s implicit aversion towards inflation and unemployment varies with income and education. While inflation aversion decreases with income and increases with the education level, unemployment aversion is independent of income and decreases with the level of education. In spite of income and education dependence, aversion towards inflation is less than aversion towards unemployment not just on average but at all levels of income and education. This suggests that issues of social incidence are not a dominant concern for macroeconomic policy making on anti-inflation and anti-unemployment policies.

Keywords: Inflation; Unemployment; Preference; Social incidence; Subjective well-being (search for similar items in EconPapers)
JEL-codes: E61 E31 E24 I31 (search for similar items in EconPapers)
Date: 2015
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