Direct Evidence for Income Comparisons and Subjective Well-Being Across Reference Groups

13 Pages Posted: 5 Nov 2015

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Markus Pannenberg

University of Applied Sciences Bielefeld - Department of Business and Economics; DIW Berlin - GSOEP; Institute for the Study of Labor (IZA), Bonn

Multiple version iconThere are 2 versions of this paper

Date Written: October 13, 2015

Abstract

This note provides evidence for the relationship between income comparisons and subjective well-being (SWB), using novel German data on self-reported comparison intensity and perceived relative income for seven reference groups. We find negative correlations between comparison intensity and SWB for colleagues, people in the same occupation and friends, but not for other reference groups, such as neighbours. Work-related income comparisons are mostly upwards and there is a strong negative correlation between perceiving to earn less than the reference group and SWB.

Keywords: income comparisons, German Socio-Economic Panel (SOEP), relative income, subjective well-being

JEL Classification: D310, D620, I310

Suggested Citation

Goerke, Laszlo and Pannenberg, Markus, Direct Evidence for Income Comparisons and Subjective Well-Being Across Reference Groups (October 13, 2015). CESifo Working Paper Series No. 5546. Available at SSRN: https://ssrn.com/abstract=2686491

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

Behringstraße 21, 7. Floor, Building H
Trier, 54296
Germany

HOME PAGE: http://www.iaaeu.de/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Markus Pannenberg

University of Applied Sciences Bielefeld - Department of Business and Economics ( email )

Universitätsstrasse 25
Bielefeld, D-33615
Germany
+49 521 106-5076 (Phone)
+49 521 106-5086 (Fax)

HOME PAGE: http://aix5.fh-bielefeld.de/~mpannenb/index.html

DIW Berlin - GSOEP ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Institute for the Study of Labor (IZA), Bonn

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
35
Abstract Views
408
PlumX Metrics