When Information Dominates Comparison: A Panel Data Analysis Using Russian Subjective Data

Claudia Senik ()

No 495, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: We propose a micro-econometric investigation into the relation between subjective life satisfaction and income distribution, using a balanced panel survey of the Russian population (RLMS), running from 1994 to 2000, including 4096 individuals. We show that in the context of the Russian very volatile environment, Hirschman’s (1973) “tunnel effect” conjecture seems to be validated : variables reflecting income distribution do not influence satisfaction through social comparisons; individuals rather seem to use their informational content in order to form their expectations. The reference group’s income exerts a positive influence on individual satisfaction, which contrasts with other studies on the subject. Inequality indices do not affect individual welfare.

Keywords: subjective welfare; relative income; inequality; transition; panel data (search for similar items in EconPapers)
JEL-codes: D60 D63 I31 P30 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2002-05-06
New Economics Papers: this item is included in nep-cis and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: When Information Dominates Comparison. A Panel Data Analysis Using Russian Subjective Data (2002)
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