Individual Needs and Social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households

François Gardes () and Philip Merrigan
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François Gardes: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper provides additional evidence, using time-series and cross-sectional Canadian survey data, for the Easterlin hypothesis of an important income elasticity of individual needs. Our analysis is based on the regression of a minimum income to satisfy needs equation derived from a simple utility maximization framework. Moreover, our specification allows computing the Arrow-Pratt relative risk-aversion index and the Intertemporal Rate of Substitution. Our results are robust to different estimation methods dealing with the endogenous nature of income. We also compute poverty rates using our estimated equation parameters and standard OECD measures of poverty and find that some subjective measures are relatively close to the OECD measures.

Keywords: Standard of living; Subjective measures of well-being; Needs and aspirations; Econometric analysis (search for similar items in EconPapers)
Date: 2008-06
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Citations: View citations in EconPapers (3)

Published in Journal of Economic Behavior and Organization, 2008, 66 (3-4), pp.582-596. ⟨10.1016/j.jebo.2006.06.009⟩

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Journal Article: Individual needs and social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households (2008)
Working Paper: Individual Needs and Social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00650842

DOI: 10.1016/j.jebo.2006.06.009

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