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http://bura.brunel.ac.uk/handle/2438/1030
Title: | Income and happiness across Europe: Do reference values matter? |
Authors: | Caporale, GM Georgellis, Y Tsitsianis, N Yin, YP |
Keywords: | Comparison income; Reference groups; Happiness; Life satisfaction. |
Issue Date: | 2007 |
Publisher: | Brunel University |
Citation: | Economics and Finance Working papers, Brunel University, 07-15 |
Abstract: | Using data from the European Social Survey (ESS), we examine the link between income and subjective well-being. We find that, for the whole sample of nineteen European countries, although income is positively correlated with both happiness and life satisfaction, reference income exerts a negative effect on individual well-being, a result consistent with the relative utility hypothesis. Performing separate analyses for some Eastern European countries, we also find some evidence of a ‘tunnel effect’, in that reference income has a positive impact on subjective well-being. Our findings support the view that in environments with stable income and employment, reference income serves as a basis for social comparisons, whereas in relatively volatile environments, it is used as a source of information for forming expectations about future status. |
URI: | http://bura.brunel.ac.uk/handle/2438/1030 |
Appears in Collections: | Economics and Finance Dept of Economics and Finance Research Papers |
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