Resource title

Income and happiness across Europe: do reference values matter?

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image for OpenScout resource :: Income and happiness across Europe: do reference values matter?

Resource description

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.

Resource author

Guglielmo Maria Caporale, Yannis Georgellis, Nicholas Tsitsianis, Ya Ping

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26190

Resource license

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