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Income Satisfaction and Deprivation in Spain

Jose Labeaga, José Alberto Molina () and Maria Navarro Paniagua ()
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Maria Navarro Paniagua: Lancaster University

No 2702, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The first objective of our paper is to identify the determinants of income satisfaction in Spain, with one of these being relative deprivation, and the second is to measure this relative deprivation, in both monetary and satisfaction terms. To that end, we use data from the eight waves of the Spanish section of the European Community Household Panel (1994-2001). With respect to the first objective, we estimate models for categorical variables in order to test whether subjective satisfaction measures depend on relative deprivation, as well as on other determinants. As for the second objective, we first calculate inequality and polarization indices and then we specifically analyze whether the Spanish tax-benefit system helped to reduce individual deprivation. Our results suggest that the more unequal the income distribution is in a group, the less income satisfied is the individual. Moreover, being unemployed is one of the main determinants of deprivation, although public transfers help to reduce individual deprivation. When we observe the amount of public transfers received, deprivation is reduced up to a certain threshold, beyond which it continues to decline, but at a lower rate.

Keywords: polarization; income satisfaction; deprivation; inequality; Spain (search for similar items in EconPapers)
JEL-codes: D31 D63 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-ltv
Date: 2007-03
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Published as 'Deprivation using satisfaction measures in Spain' in: Journal of Policy Modeling, 2011, 33 (2), 287-310

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