Direct Evidence on Income Comparisons and their Welfare Effects

Claudia Senik ()

No 3195, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides unheard direct evidence that comparisons exert a significant effect on subjective well-being. It also evaluates the relative importance of different types of benchmarks. Dynamic comparisons outweigh static ones. Internal benchmarks are more important than external reference groups. Local comparisons (to parents, former colleagues or school classmates) are more powerful than general comparisons such as my rank in the social ladder. The most important impact comes from the deterioration of my living standard and from under-performing my former schoolmates or colleagues. A possible interpretation is that comparisons benchmarks are all the more significant as they are interpreted in terms of seized or lost opportunities.

Keywords: income mobility; internal and external benchmarks; subjective well-being; income comparisons; transition (search for similar items in EconPapers)
JEL-codes: C25 D31 D63 I31 J31 O57 P3 Z13 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2007-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - published in: Journal of Economic Behavior and Organization, 2009, 72 (1), 408-424

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https://docs.iza.org/dp3195.pdf (application/pdf)

Related works:
Journal Article: Direct evidence on income comparisons and their welfare effects (2009)
Working Paper: Direct Evidence on Income Comparisons and their Welfare Effects (2009)
Working Paper: Direct evidence on income comparisons and their welfare effects (2008)
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