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When Information Dominates Comparison: A Panel Data Analysis Using Russian Subjective Data

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  • Claudia Senik

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.

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  • Claudia Senik, 2002. "When Information Dominates Comparison: A Panel Data Analysis Using Russian Subjective Data," William Davidson Institute Working Papers Series 495, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2002-495
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    2. David G. Blanchflower & Andrew J. Oswald, 2004. "Money, Sex and Happiness: An Empirical Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 393-415, October.
    3. Andrew E. Clark, 2008. "Happiness, habits and high rank: Comparisons in economic and social life," Working Papers halshs-00586049, HAL.
    4. Ekaterina Kalugina & Boris Najman, 2003. "Travail et pauvreté en Russie : évaluations objectives et perceptions subjectives," Économie et Statistique, Programme National Persée, vol. 367(1), pages 83-100.
    5. Clark, Andrew & Knabe, Andreas & Rätzel, Steffen, 2010. "Boon or bane? Others' unemployment, well-being and job insecurity," Labour Economics, Elsevier, vol. 17(1), pages 52-61, January.
    6. Frijters, Paul & Liu, Amy Y.C. & Meng, Xin, 2012. "Are optimistic expectations keeping the Chinese happy?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 159-171.
    7. Russell Smyth & Ingrid Nielsen & Qingguo Zhai, 2010. "Personal Well-being in Urban China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 95(2), pages 231-251, January.
    8. Lelkes, Orsolya, 2003. "A pénz boldogít? A jövedelem és hasznosság kapcsolatának empirikus elemzése [Can money buy happiness? An empirical analysis of the relation between income and utility]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 383-405.
    9. Eduardo Pérez-Asenjo, 2011. "If happiness is relative, against whom do we compare ourselves? Implications for labour supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1411-1442, October.
    10. Gross-Manos, Daphna, 2017. "Material well-being and social exclusion association with children's subjective Well-being: Cross-national analysis of 14 countries," Children and Youth Services Review, Elsevier, vol. 80(C), pages 116-128.
    11. La, Binh Thanh & Lim, Steven & Cameron, Michael P. & Tran, Tuyen Quang & Nguyen, Minh Thi, 2021. "Absolute income, comparison income and subjective well-being in a transitional country: Panel evidence from Vietnamese household surveys," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 368-385.
    12. Senik, Claudia, 2004. "When information dominates comparison: Learning from Russian subjective panel data," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2099-2123, August.

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    More about this item

    Keywords

    subjective welfare; relative income; inequality; transition; panel data;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

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