Arbeitspapier
Income comparisons, income formation, and subjective well-being: New evidence on envy versus signaling
Drawing on the distinction between envy and signaling effects in income comparison, this paper uses 307,465 observations for subjective well-being and its covariates from Germany, 1990-2009, to study whether the nature of income comparison has changed in the process of economic development, and how such changes are related to changes in the nature of income formation. By conceptualizing a person's comparison income as the income predicted by an earnings equation, we find that, while in 1990-1999 envy has been the dominant concern in West Germany and signaling the dominant factor in East Germany, income comparison was non-existing in 2000-2009. We also find that the earnings equation reflects people's ability more accurately in the second than in the first period. Together, these findings suggest that comparing one's income with people of the same ability is important only when ability is insufficiently reflected in own income.
- Language
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Englisch
- Bibliographic citation
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Series: SOEPpapers on Multidisciplinary Panel Data Research ; No. 552
- Classification
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Wirtschaft
Personal Income, Wealth, and Their Distributions
General Welfare; Well-Being
Wage Level and Structure; Wage Differentials
Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training: Welfare, Income, Wealth, and Poverty
Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
- Subject
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income comparison
envy
signaling
subjective well-being
income formation
- Event
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Geistige Schöpfung
- (who)
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Welsch, Heinz
Kühling, Jan
- Event
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Veröffentlichung
- (who)
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Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
-
Berlin
- (when)
-
2013
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Welsch, Heinz
- Kühling, Jan
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2013
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Direct evidence on income comparisons and subjective well-being
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Direct Evidence for Income Comparisons and Subjective Well-Being across Reference Groups
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