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Testing the Tunnel Effect: Comparison, Age and Happiness in UK and German Panels

Felix FitzRoy, Michael Nolan, Max Steinhardt () and David Ulph
Additional contact information
Michael Nolan: University of Hull
David Ulph: University of St. Andrews

No 201304, Discussion Paper Series, School of Economics and Finance from School of Economics and Finance, University of St Andrews

Abstract: In contrast to previous results combining all ages we find positive effects of comparison income on happiness for the under 45s, and negative effects for those over 45. In the BHPS these coefficients are several times the magnitude of own income effects. In GSOEP they cancel to give no effect of effect of comparison income on life satisfaction in the whole sample, when controlling for fixed effects, and time-in-panel, and with flexible, age-group dummies. The residual age-happiness relationship is hump-shaped in all three countries. Results are consistent with a simple life cycle model of relative income under uncertainty.

Keywords: subjective life-satisfaction; comparison income; reference groups; age; welfare (search for similar items in EconPapers)
JEL-codes: D10 I31 J10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dem, nep-eur and nep-hap
Date: 2013-07-09
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Related works:
Journal Article: Testing the tunnel effect: comparison, age and happiness in UK and German panels (2014) Downloads
Working Paper: Testing the Tunnel Effect: Comparison, Age and Happiness in UK and German Panels (2013) Downloads
Working Paper: Testing the Tunnel Effect: Comparison, Age and Happiness in UK and German Panels (2013) Downloads
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