When Information Dominates Comparison. Learning from Russian Subjective Panel Data

32 Pages Posted: 14 Nov 2002

See all articles by Claudia Senik

Claudia Senik

National Center for Scientific Research - Department and Laboratory of Applied and Theoretical Economics (DELTA); Universite Paris IV Sorbonne; IZA Institute of Labor Economics

Date Written: November 12, 2002

Abstract

We propose a micro-econometric investigation into the relation between subjective life satisfaction and income distribution, using a balanced panel survey of the Russian population (RLMS), running from 1994 to 2000, including 4096 individuals. We show that in the context of the Russian very volatile environment, Hirschman's (1973) "tunnel effect" conjecture seems to be validated: Variables reflecting income distribution do not influence satisfaction through social comparisons; individuals rather seem to use their informational content in order to form their expectations. The reference group's income exerts a positive influence on individual satisfaction, which contrasts with other studies on the subject. Inequality indices do not affect individual welfare.

Keywords: subjective welfare, relative income, inequality, transition, panel data

JEL Classification: I31, D60, D63, P30

Suggested Citation

Senik, Claudia, When Information Dominates Comparison. Learning from Russian Subjective Panel Data (November 12, 2002). Available at SSRN: https://ssrn.com/abstract=328180 or http://dx.doi.org/10.2139/ssrn.328180

Claudia Senik (Contact Author)

National Center for Scientific Research - Department and Laboratory of Applied and Theoretical Economics (DELTA) ( email )

ENS, 48, bd Jourdan
75014 Paris
France
+33 1 4313 6312 (Phone)

Universite Paris IV Sorbonne

Department of Economics
75230 Paris Cedex 05
France
01 43 13 63 12 (Phone)

IZA Institute of Labor Economics

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