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Using Panel Data on Income Satisfaction to Estimate the Equivalence Scale Elasticity

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  • Schwarze, Johannes

    (University of Bamberg)

Abstract

In this paper a new method to estimate the equivalence scale elasticity using individual panel data on income satisfaction will be developed. In contrast to other subjective approaches, the present one benefits from the fact that no direct cardinal individual welfare function has to be specified. In addition, panel data enables different scale use by the respondents to be controlled. The approach gives straightforward evidence: Obviously there is an optimal elasticity at which people feel satisfied with their income.

Suggested Citation

  • Schwarze, Johannes, 2000. "Using Panel Data on Income Satisfaction to Estimate the Equivalence Scale Elasticity," IZA Discussion Papers 224, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp224
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    File URL: https://docs.iza.org/dp224.pdf
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    References listed on IDEAS

    as
    1. Alan Barrett & Philip J. O’Connell, 2001. "Is There a Wage Premium for Returning Irish Migrants?," The Economic and Social Review, Economic and Social Studies, vol. 32(1), pages 1-21.
    2. Kugler, Adriana & Saint-Paul, Gilles, 2000. "Hiring and Firing Costs, Adverse Selection and Long-term Unemployment," IZA Discussion Papers 134, Institute of Labor Economics (IZA).
    3. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
    4. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, Institute of Labor Economics (IZA).
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    Cited by:

    1. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.

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    More about this item

    Keywords

    income satisfaction; Equivalence scales; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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