Are Americans Really Less Happy With Their Incomes?

Arie Kapteyn, James Smith and Arthur van Soest ()

No WR-858, Working Papers from RAND Corporation

Abstract: Recent economic research on international comparisons of subjective well-being suffers from several important biases due to the potential incomparability of response scales within and across countries. In this paper the authors concentrate on self-reported satisfaction with income in two countries: The Netherlands and the U.S. The comparability problem is addressed by using anchoring vignettes. They find that in the raw data, Americans appear decidedly less satisfied with their income than the Dutch. It turns out however that after response scale adjustment based on vignettes the distribution of satisfaction in the two countries is essentially identical. In addition, they find that the within-country cross-sectional effect of income on satisfaction ? a key parameter in the recent debate in the economic literature ? is significantly under-estimated especially in the US when differences in response scales are not taken into account.

Keywords: happiness; life satisfaction; vignettes; reporting bias (search for similar items in EconPapers)
JEL-codes: I30 J30 (search for similar items in EconPapers)
Pages: 38
Date: 2011-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Are A mericans Really Less Happy with Their Incomes? (2013)
Working Paper: Are Americans Really Less Happy With Their Incomes? (2011)
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