Life Satisfaction, Income Comparisons and Individual Traits

21 Pages Posted: 11 May 2019

See all articles by Santi Budría

Santi Budría

Comillas Pontifical University

Ada Ferrer‐I‐Carbonell

IZA Institute of Labor Economics

Date Written: June 2019

Abstract

People gain utility from occupying a higher ranked position in the income distribution of the reference group. This paper investigates whether these gains depend on an individual's set of personality and affective traits. Using the 2000 to 2013 waves of the German Socio‐economic Panel dataset (SOEP), a subjective question on Life Satisfaction, and three different measures of personal and affective traits, we find significant and robust differences across groups and conclude that traits determine the relationship between rank and life satisfaction. The heterogeneity on the importance of income comparisons is relevant, for example, when building economic models, predicting individuals' behavior, or making welfare judgments.

Keywords: income comparisons, life satisfaction, personality and affective traits

Suggested Citation

Budría, Santi and Ferrer‐I‐Carbonell, Ada, Life Satisfaction, Income Comparisons and Individual Traits (June 2019). Review of Income and Wealth, Vol. 65, Issue 2, pp. 337-357, 2019. Available at SSRN: https://ssrn.com/abstract=3385029 or http://dx.doi.org/10.1111/roiw.12353

Santi Budría (Contact Author)

Comillas Pontifical University ( email )

Alberto Aguilera 21
Madrid, Madrid 28015
Spain

Ada Ferrer‐I‐Carbonell

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
19
PlumX Metrics