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Individual Well-Being in a Dynamic Perspective

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  • Conchita D'Ambrosio
  • Joachim R. Frick

Abstract

This paper explores the determinants of individual well-being as measured by self-reported levels of satisfaction with income. Making full use of the panel data nature of the German Socio-Economic Panel, we provide empirical evidence for well-being depending on absolute and on relative levels of income in a dynamic framework. This finding holds after controlling for other influential factors in a multivariate setting. The main novelty of the paper is the consideration of dynamic aspects: the individual's own history as well as the relative income performance with respect to the others living in the society under analysis do play a major role in the assessment of well-being.

Suggested Citation

  • Conchita D'Ambrosio & Joachim R. Frick, 2007. "Individual Well-Being in a Dynamic Perspective," Discussion Papers of DIW Berlin 673, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp673
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    More about this item

    Keywords

    Interdependent Preferences; Inequality Aversion; Status; Subjective Well-Being; SOEP;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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