Subjective Well-Being and Relative Deprivation: An Empirical Link

D'Ambrosio, Conchita; Frick, Joachim R.

doi:10.2139/ssrn.606522

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Subjective Well-Being and Relative Deprivation: An Empirical Link

IZA Discussion Paper No. 1351

24 Pages Posted: 18 Oct 2004

See all articles by Conchita D'Ambrosio

Conchita D'Ambrosio

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS)

Joachim R. Frick

German Institute for Economic Research (DIW Berlin) (Deceased) ; Institute for the Study of Labor (IZA) (Deceased)

Date Written: October 2004

Abstract

This paper explores the relationship between two well-established concepts of measuring individual well-being: the concept of happiness, i.e. self-reported level of satisfaction with income and life, and relative deprivation/satisfaction, i.e. the gaps between the individual's income and the incomes of all individuals richer/poorer than him. Operationalizing both concepts using micro panel data from the German Socio-Economic Panel (SOEP), we provide empirical evidence for subjective well-being depending more on relative satisfaction than on absolute levels of income. This finding holds even after controlling for other influential factors in a multivariate setting.

Keywords: relative deprivation, satisfaction, subjective well-being, SOEP

JEL Classification: D63, I31, D31

Suggested Citation: Suggested Citation

D'Ambrosio, Conchita and Frick, Joachim R., Subjective Well-Being and Relative Deprivation: An Empirical Link (October 2004). IZA Discussion Paper No. 1351, Available at SSRN: https://ssrn.com/abstract=606522 or http://dx.doi.org/10.2139/ssrn.606522