The Relative Utility Hypothesis With and Without Self-reported Reference Wages
Adrián de la Garza,
Giovanni Mastrobuoni (),
Atsushi Sannabe and
Katsunori Yamada ()
No 2010-19, Working Papers from Banco de México
This article uses survey data of workers in Japan to study the effects of own and self-reported reference wages on subjective well-being. Higher wages lead to higher life and job satisfaction. When workers perceive that their peers earn higher wages, they report lower well-being. We compare our results with relative utility tests in the literature and develop a generalized version of the classical measurement error model to show that the estimated bias of the reference wage effect can go in both directions. We propose an IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the "true" effect.
Keywords: Subjective well-being; relative utility; reference wages (search for similar items in EconPapers)
JEL-codes: D00 J28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
https://www.banxico.org.mx/publications-and-press/ ... -9FD595552F30%7D.pdf (application/pdf)
Working Paper: The Relative Utility Hypothesis With and Without Self-reported Reference Wages (2012)
Working Paper: The Relative Utility Hypothesis With and Without Self-reported Reference Wages (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2010-19
Access Statistics for this paper
More papers in Working Papers from Banco de México Contact information at EDIRC.
Bibliographic data for series maintained by Dirección de Sistemas ( this e-mail address is bad, please contact ).