Subjective Well-Being and the Family: Results from an Ordered Probit Model with Multiple Random Effects

26 Pages Posted: 2 Sep 2004

See all articles by Rainer Winkelmann

Rainer Winkelmann

University of Zurich - Statistics and Empirical Economic Research; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: February 2004

Abstract

The previous literature on the determinants of individual well-being has failed to fully account for the interdependencies in well-being at the family level. This paper develops an ordered probit model with multiple random effects that allows to identify the intrafamily correlation in well-being. The parameters of the model can be estimated with panel data using Maximum Marginal Likelihood. The approach is illustrated in an application using panel data for the period 1984-1997 from the German Socio-Economic Panel in which both inter-generational and intra-marriage correlations in well-being are estimated.

Keywords: ordered probit model, error components, German Socio-Economic Panel

JEL Classification: C23, C25, I31, J19

Suggested Citation

Winkelmann, Rainer, Subjective Well-Being and the Family: Results from an Ordered Probit Model with Multiple Random Effects (February 2004). IZA Discussion Paper No. 1016. Available at SSRN: https://ssrn.com/abstract=508482

Rainer Winkelmann (Contact Author)

University of Zurich - Statistics and Empirical Economic Research ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

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