Not Getting What You Want? The Impact of Income Comparisons on Subjective Well-Being—Findings of a Population-Based Longitudinal Study in Germany

André Hajek and Hans-Helmut König
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André Hajek: Department of Health Economics and Health Services Research, University Medical Center Hamburg-Eppendorf, 20246 Hamburg, Germany
Hans-Helmut König: Department of Health Economics and Health Services Research, University Medical Center Hamburg-Eppendorf, 20246 Hamburg, Germany

IJERPH, 2019, vol. 16, issue 15, 1-8

Abstract: Previous studies have mainly focused on interindividual income comparisons (e.g., comparisons with colleagues or neighbors), whereas intraindividual income comparisons (i.e., difference between factual income and expectations) have rarely been investigated in well-being research. Thus, the aim of this study was to investigate the role of intraindividual income comparisons on subjective well-being (negative/positive emotions and life satisfaction) longitudinally. Data from 2005 to 2013 (biannually) were used from the German Socio-Economic Panel (GSOEP), a nationally representative, longitudinal study. Affective well-being (negative and positive emotions) were quantified by using the affective well-being scale-SOEP. Life satisfaction was quantified using the widely used one-item form. Intraindividual income comparisons were analyzed by using the distance between the own individual income and fair income (“how high would your net income have to be in order to be just”). We tested whether negative (i.e., factual income was lower than their self-rated just income) and positive income comparisons (otherwise) affect the outcome measures differently. Fixed effects regressions showed that positive emotions increased with positive income comparisons in the total sample ( β = 0.16, p < 0.05). In contrast, negative income comparisons neither affect negative emotions nor satisfaction with life. Strategies to shift income expectations might be beneficial for increasing positive emotions.

Keywords: income comparisons; longitudinal study; subjective well-being; life satisfaction; emotions; GSOEP; relative income; happiness (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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