Do reference values matter? Some notes and extensions on "income and happiness across Europe" (Journal article)

Drichoutis, A. C./ Nayga, R. M./ Lazaridis, P.

We add to the analysis conducted in an article in this journal authored by Caporale, Georgellis, Tsitsianis, and Yin (2009) (hereafter CGTY) which assessed the relationship between subjective well-being, income and relative income in Europe. Specifically, we note some data management, model/variable specification, and econometric issues that can affect the validity of the findings of CGTY. We then present our own augmented model to test the robustness of the results from the CGTY study. When we try to replicate CGTY's estimation, we find that the main variable of interest, i.e. the reference income variable, reverts sign. We also find several differences in our results, the most important of which is that, in contrast to CGTY's result that suggests a statistically significant negative reference income effect on life satisfaction, reference income does not really significantly affect life satisfaction in our estimations. (C) 2010 Elsevier B.V. All rights reserved.
Institution and School/Department of submitter: Πανεπιστήμιο Ιωαννίνων. Σχολή Οικονομικών και Κοινωνικών Επιστημών. Τμήμα Οικονομικών Επιστημών
Keywords: comparison income,reference groups,happiness,life satisfaction,relative-income
ISSN: 0167-4870
Link: <Go to ISI>://000281014900001
Publisher: Elsevier
Appears in Collections:Άρθρα σε επιστημονικά περιοδικά ( Ανοικτά)

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