Resource title

Income and Happiness : New Results from Generalized Threshold and Sequential Models

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Resource description

Empirical studies on the relationship between income and happiness commonly use standard ordered response models, the most well-known representatives being the ordered logit and the ordered probit. However, these models restrict the marginal probability effects by design, and therefore limit the analysis of distributional aspects of a change in income, that is, the study of whether the income effect depend on a person's happiness. In this paper we pinpoint the shortcomings of standard models and propose two alternatives, namely generalized threshold and sequential models. With data of two waves of the German Socio- Economic Panel, 1984 and 1997, we show that the more general models yield different marginal probability effects than standard models.

Resource author

Rainer Winkelmann, Stefan Boes

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20415

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Adapt according to the presented license agreement and reference the original author.